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Business Management

Debunking the Myth of Urban Mobility

Will Electric Bikes and Scooters Ever Sell In the U.S. Market?

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4.6 million. “Consumers are seeking refuge from higher gasoline prices, electric two-wheel vehicles are growing more mature, and cities are becoming increasingly congested with traffic,” says John Gartner, research director with Navigant Research. “All of these factors will contribute to growing demand for power two-wheel vehicles – particularly high-powered e-motorcycles.”

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the 2014 zero-s model  (photo courtesy of zero)brammo’s empulse r can reach a top speed of 110 mph. (photo courtesy of brammo)the lightning motorcycle team with the ls-218 (l to r): glynn kerr, the bike's designer, jim shook, who handled the clay modeling, and ceo richard hatfield. brd redshift super moto 
Terra Motors A400i electric scooter

All pretty rosy, statistically speaking. Meanwhile Vectrix, one of the pioneers in the electric scooter market, recently filed for bankruptcy (again) and it was liquidated (again). Around April 1st, 2014 Vectrix Motorcycles (sic) filed for chapter 7 bankruptcy, ending the company’s checkered year with an attempt at convincing the market that electric powered maxi scooters were viable. With estimated liabilities of between $10 million and $50 million, the company faced liquidation of its remaining assets (they had filed for Chapter 11 bankruptcy in 2009, restructuring and liquidating many of its assets at that time).

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The design brief should have sizzled since the Vectrix VX1 scooter was intended to appeal to non-motorcyclists, as its twist-throttle single-gear drivetrain and hand-operated brakes meant almost anyone could ride it. But it fizzled despite all the theoretical reasons for it to be a success.

 

“Had Vectrix been European, rather than U.S.-based, we think things may have been different, especially had it been based in scooter-friendly countries like Italy, Germany or France,” suggests U.K.-based Transport Evolved writer Nikki Gordon-Bloomfield. “There aren’t that many places where two-wheeled commuting is practical in the U.S. At least, that’s the impression we get looking from the outside in. That’s partly due to traffic conditions, traffic congestion and vehicle size, but it’s also due to commuter expectations and lifestyle. For the most part, while many Americans enjoy the pleasures of two-wheeled transportation, it tends to be in the form of a weekend pastime, not a daily commute. Furthermore, European-style scooters are generally ignored in deference to more traditional full-size motorcycles.”

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The operative term for EV success is “motorcycles” not “scooters.”

 

“We make electric-powered motorcycles, NOT scooters,” stressed Zero’s VP of global marketing, Scot Harden. To this day, he points out the name of the company is Zero MOTORCYCLES. Zero’s mission is to transform the motorcycling experience, not to change the way the American people think about scooters or mobility. “Through extensive research, insight and experience, Zero combines the art and science of motorcycle development to create and manufacture products that excite and inspire brand loyalty.” This is definitely not a sterile, commuter-based approach to the EV marketplace.

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“From our 2014 Zero SR FX ‘stealthfighter’ to our police and security line-up, it’s been a truly amazing year for Zero Motorcycles,” says Harden. “A lot of fun has been had in the process of bringing these amazing new bikes to the marketplace…” proving passion can be more of a motivating factor in the motorcycle market than cold, hard facts.

 

Pushing the performance envelope is just part of the equation for Brammo, albeit a large portion! “Our customers expect Brammo to design and produce the world’s most desirable, high performance electric motorcycles… and that’s exactly what we do,” says Craig Bramscher, founder and CEO of Brammo. With its unique water-cooled motor, six-speed gearbox and integrated rapid-charging system, Brammo’s 2014 Empulse remains as the market leader in the category. A top speed of 110 mph and a 3kW onboard charger means the Brammo Empulse retains its crown as the world’s fastest electric motorcycle in serial production both riding and charging.

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Brammo is expanding into the apparel market and attempting to broaden the range of products its dealers can offer (hey, it works for Harley-Davidson – revenue from general merchandise, which includes MotorClothes apparel was $75.9 million last year). “After hearing from our fans and customers across the globe, we launched a new Brammo Merchandise store for all to access the latest Brammo Gear. Like our bikes, our merchandise is kind to the planet too; every item in our store is recycled, organic, or otherwise sustainable.”

 

It is working – “2014 continues to be an outstanding year for Brammo,” according to Bramscher. “We launched the 2014 Empulse and continue to expand global distribution, recently shipping the Empulse across Europe. We also announced a groundbreaking lease program providing another convenient option for customers to enjoy Brammo Electric Motorcycles.”

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Thinking different is not the sole provenance of the big boys like Brammo and Zero. New players are bringing new ideas into the EV game. “The major breakthrough is simply the approach,” claims Marc Fenigstein, CEO and co-founder of BRD Motorcycles. “BRD doesn’t assume that anyone needs electric. Gas bikes kick ass, and none of us would trade our gas bikes for anything that is slower, uglier, or less fun!” Once the elephant in the room had been addressed, the Bay Area upstart started with its Redshift dirt bike and a Super Moto spin off.

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“Our goal is to create motorcycles that are easier to ride fast than anything else out there. We build electric bikes because we love instant throttle response and flat, endless torque. Because we want the next bike we purchase to be faster than our last one,” says Fenigsetein. “We set out to build a bike that was prettier, faster and more fun than what was in our garages.” With the equivalent of 40 hp on tap and an MSRP under $15,500, BRD might be onto something, especially when compared to the stratospheric performance and corresponding prices of Mission or Lightning.

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With its price tag of $38,888 and a shocking 200 hp on tap, Lightning is about to strike the EV market. On December 16, 2013 they announced “Lightning VIN 000001 is registered and on the street! Lightning has completed all of the required DOT set up and DMV requirements. This milestone moves Lightning one step closer to delivering our superbike and sportbike to the market.” By the time The Quail Motorcycle Gathering took place on May 17, Lightning was ready to unveil what it called the most technologically advanced and highest performing street-legal production motorcycle in the world – the Lightning Superbike LS-218.

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“Since 2006 the Lightning team has been dedicated to developing electric motorcycles that meet and exceed the performance of the best ICE (Induction Combustion Engine) alternatives”, said Richard Hatfield, CEO of Lightning Motorcycle. “To have broad acceptance from the motorcyclist community, we need to provide design, performance and value that competes head to head with the best gasoline motorcycles on the market. Lightning’s R&D team has developed electric vehicle technology through years of competition at racing events around the world. We believe that the LS-218 offers consumers the best of design, performance and value in today’s market.

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“Consumers no longer are required to pay more for less performance to support green technology,” said Hatfield. “The Lightning LS-218′s can compete with the best ICE alternatives today. Lightning achieved the goal we set in 2009 to compete against and win against the best gasoline race bikes. In June 2013, at Pikes Peak, Lightning won first overall competing against 93 other motorcycle teams (electric and gasoline) by over 20 seconds.”


Big Names Nobody Has Heard Of…

As our editor discovered at the Taiwan show, there are big things happening in the EV market, even if you can’t pronounce the names. Billed as Japan’s top electric two- and three-wheeler developer, manufacturer and retailer, Terra Motors plans to sell 100,000 units of its new A400i electric scooter in 2015 alone! Although the firm’s funding was actually put together by a California-based venture capital investor – Fenox Venture Capital – and major Japanese venture capital firm Mizuho Capital Co., Ltd., Terra has no plans to sell into the U.S. or Japan. Instead the company plans to expand to India, Bangladesh, and in few years, to Indonesia, Taiwan, Thailand and other Asian countries.

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“Generally speaking, electric vehicles tend to be thought of as a means of mobility in Europe and in America, but their main market is really Asia,” explains Toru Tokushige, CEO and founder of Terra Motors. “More than 30 million electric two wheelers were sold in China in 2013 alone, and hundreds of thousands of electrics have already been sold in India and in Bangladesh because of the high price of gasoline. Therefore, we need to focus on Asian markets.” A polite way of saying electric scooters won’t sell in the U.S. – borne out by the rise and fall of Vectrix scooters and companies like Terra Motors blatantly turning their back on the U.S. (even though Tokushige started his business in the Silicon Valley).

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Navigant’s numbers also skew toward Asia in general and China in particular. “The market for e-motorcycles and e-scooters is led by China, where the majority of these vehicles are sold,” says Gartner. According to the report, however, policies limiting urban traffic in China indicate reduced sales in that country. E-motorcycle manufacturers in North America and Europe will address the market challenges by improving product quality and expanding their distribution channels. Navigant Research forecasts that sales of e-motorcycles and e-scooters in these two regions will expand at a compound annual growth rate (CAGR) of more than 30 percent through 2023.

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There is a global market for cheap transportation and more than 80 percent of the world sales for gasoline motorcycles is currently concentrated in Asia. Motorcycles have improved peoples’ lives as a convenient means of transportation, but as gas prices continue to rise and concerns about emissions are eliminating smoky old 2-strokes, EVs are seen as the wave of the future. However, what will sell in Asia doesn’t necessarily translate into the U.S. motorcycle market.

 

So bottom line: U.S. dealers can expect to see 30 percent growth of the EV motorcycle segment within the next 10 years … on paper! 

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