# Can E-Bikes Rescue the Covid Bicycle Boom? | Tech News (HT Tech) > The bike industry is riding into a rough patch as inflation surges. But two-wheel rides still look like a long-term winner. # Can E-Bikes Rescue the Covid Bicycle Boom? ## The bike industry is riding into a rough patch as inflation surges. But two-wheel rides still look like a long-term winner. Sept 24 2022, 01:14 IST ![Follow on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/follow-us-facebook.png) ![Follow on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/follow-us-facebook-hover.png) ![Share](https://images.hindustantimes.com/tech/static/revamp/images/png/Share.png) ![Share](https://images.hindustantimes.com/tech/static/revamp/images/png/Shareclicked.png) ![Share on WhatsApp](https://images.hindustantimes.com/tech/static/revamp/images/png/whatsapp.png) ![Share on WhatsApp](https://images.hindustantimes.com/tech/static/revamp/images/png/whatsapp-hover.png) ![Share on Twitter](https://images.hindustantimes.com/tech/static/revamp/images/png/twitter.png) ![Share on Twitter](https://images.hindustantimes.com/tech/static/revamp/images/png/twitter-hover.png) ![Share on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/facebook.png) ![Share on Facebook](https://images.hindustantimes.com/tech/static/revamp/images/png/facebook-hover.png) ![Bookmark](https://images.hindustantimes.com/tech/static/revamp/images/png/Bookmark.png) ![Bookmarked](https://images.hindustantimes.com/tech/static/revamp/images/png/Bookmarked.png) ![E-bikes](https://images.hindustantimes.com/tech/img/2022/09/23/1600x900/1dbda3dc-c2d5-11ec-b66b-ddda15d88888_1652785459242_1663960724288_1663960724288.jpg) Cities are finally making space for cyclists and e-bikes are massively popular while regular bikes have hit a rough patch. (HT_PRINT) ![Author Photo](https://images.hindustantimes.com/tech/static/revamp/images/png/HTTech-new-circle-logo.png) ### By BLOOMBERG Is air leaking out of the bicycle boom? Recent profit warnings from European bike companies suggest weakening demand and surplus inventory are becoming a problem. “The industry has overordered on bikes. Dealers got overexcited and shops felt also pressured to place orders due to supply chain issues,” says Will Butler-Adams, chief executive officer of UK folding bike company Brompton Bicycle Ltd. The recent slowdown is a stark change from the past couple of years when the pandemic sent consumers flocking to bike dealers so they could avoid public transport, entertain their kids and enjoy more time outdoors. Back then, buyers were often forced to pay elevated prices for whatever was available or wait more than a year for their new ride to be delivered. Also read click here. Now stores may have to offer discounts to shift unwanted bikes, and holding unwanted inventory could cause cashflow problems for small dealers and manufacturers. Yet although regular bikes have hit a rough patch, the industry’s long-term prospects still look rosy. Cities are finally making space for cyclists and e-bikes are massively popular. Why buy a car or van for urban journeys when two wheels (plus an electric motor) can get the job done for a fraction of the price? Last week, Swedish bike-equipment firm Thule Group AB warned that retailer inventories of bike and bike gear had risen during the third quarter. Combined with inflation-related consumer uncertainty, it said “bike retailers around the world have reduced their purchases significantly.” A day later, helmet company MIPS AB warned of “too high inventory levels” of bikes and bike accessories at dealers. (Thule, MIPS and Brompton’s Butler-Adams’ all said long-term cycling trends remained encouraging.) A normalization of demand was inevitable: Altogether, around 4.5 million more bikes were sold in Europe in the last two years compared with pre-pandemic levels. And the industry isn’t alone in suffering from a so-called “bullwhip effect,” whereby stretched lead times and inaccurate assessments of demand lead to too much inventory. Exercise-bike company Peloton Interactive Inc. has had much the same issue, as have backyard grill makers. The cost-of living crisis is an additional headwind for this usually low-margin industry. While switching from a car to a bike saves on fuel, potential customers may think twice about splashing out four or five figures on a two-wheeler. Consumers have lately diverted more of their disposable income toward experiences like travel, rather than buying stuff. Japanese bike-component giant Shimano Inc. and UK bike retailer Halfords Group Inc. have also warned of cooling demand. For now, the inventory glut is mostly in the cheaper end of the market. German direct-to consumer brand Canyon Bicycle Gmbh, which serves the mid-to-high end market, generated 330 million euros ($329.6 million) of sales in the first six months of 2022, a 25% increase. E-bikes, which contain an electric motor giving the rider with more oomph when they pedal, remain another bright spot. Signa Sports United NV said last month that e-bikes sold out “within days” when they became available on its websites. Around 5 million e-bikes were sold in Europe in 2021, or more than a fifth of the total bicycle purchases. In Germany, e-bikes now account for more than 40% of bike sales, and there are around 25 times more e-bikes on the streets than electric cars. For those of us who wish cities weren’t so beholden to car owners — battery-powered or otherwise — this is great news. The boom is partly thanks to the popularity of employer-sponsored leasing plans, which make the roughly 2000 euro-cost of an e-bike more manageable, and apps such as Lime which let rental customers sample them for a few euros. No wonder e-bikes are an increasingly a popular choice for commuting, school drop-offs and last-mile commercial delivery. Bike manufacturing still remains fairly low-margin — and passion, not profit, motivates a lot of dealers and niche producers. Yet the arrival of e-bikes are what’s behind an almost trebling of the cost of a new bike in the past decade, and that extra potential profit is driving consolidation and attracting new investment. Last month, KKR & Co. completed a 1.6 billion-euro takeover of the listed Dutch bike conglomerate Accell Group NV. Accell owns Raleigh and the Babboe cargo bike brand and more than half of its sales are e-bikes. While one might query KKR’s timing and the high price paid, it isn’t alone in spying a long-term financial opportunity. Dutch bike conglomerate Pon Holdings BV in January acquired Cannondale and other bike brands from Dorel Industries Inc. for more than $800 million. Basketball player LeBron James was part of a consortium that invested 30 million euros in Canyon in July. Luxury carmaker Porsche AG has announced two new e-bike joint ventures recently along with several investments in e-bike companies. Even oil giant Shell Plc is joining the e-bike stampede. Despite the energy crisis, there are also encouraging signs of bicycle manufacturing returning to Europe, after having been largely concentrated in Asia for the past few decades. European bike production rose 10% last year to around 16 million units, according to the European bike industry association CONEBI. Portugal’s Agueda has been dubbed “bike valley” after becoming a hot-spot for such investment. German automotive supplier Robert Bosch GmbH produces e-bike drives and batteries in Hungary. Italian road bike brand Bianchi is investing 40 million euros to produce carbon fiber frames in its home market. And Brompton unveiled plans this year to build a 100 million-pound bike plant in south east England. “European demand is big enough to develop a domestic supply chain” says Butler-Adams whose company already produces many components in the UK. “The urban cycling boom isn’t a blip. We are on a journey of removing cars from cities.” Not withstanding the industry’s current difficulties, I’m confident he’s right on both counts. Chris Bryant is a Bloomberg Opinion columnist covering industrial companies in Europe. Previously, he was a reporter for the Financial Times. Catch all the Latest Tech News, Mobile News, Laptop News, Gaming news, Wearables News , How To News, also keep up with us on Whatsapp channel,Twitter, Facebook, Google News, and Instagram. 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