Between a pandemic-fueled bike boom and growing interest in electric transport options, demand for electric bicycles, or e-bikes, has been picking up speed.
“Let's face it — everything electric is just hot, whether it be cars, now planes, trains,” Don DiCostanzo, CEO and founder of Pedego Electric Bikes, said on Yahoo Finance Live (video above). “Electric bikes are probably the fastest-growing segment of any of these categories because they're affordable for everybody.”
The electric bicycle category, like bicycles overall, saw sales increase during the pandemic as people sought outdoor, socially distant activities. Year-over-year bicycle sales in the U.S. ending April 2021 were up 57%, according to NPD, and while bicycle sales declined in April — a potential sign that the bike boom is slowing— e-bikes were the exception and saw continued sales growth.
DiConstanzo attributed that growth to e-bikes being “a perfect way” for people to get outdoors, thanks to the electric motor and battery that assists cyclists with pedaling.
“You don't have to sweat," he said. "You can do as much exercise as you want or none at all, depending on what you want to do. ... And the four-letter word that keeps most people from cycling, which is hill, it goes away because it's actually more fun to ride one of our bikes up a hill than it is down a hill.”
“There's a social dynamic” to electric bicycles
At a price point that is less expensive than most cars — the cost of an e-bike ranges from $600 to $8,000 — electric bikes offer a more affordable way of getting around while also reducing carbon emissions. And like making tax credits available for electric vehicles, governments also want to make e-bikes cheaper.
A federal bill, called the E-BIKE Act, is making its way through the U.S. House of Representatives and would provide a rebate of 30% to consumers who purchase new electric bikes. In July, California also enacted an e-bike incentive program as part of its state budget that allocates $10 million for electric bicycle grants.
But electric bike companies haven't been immune to rising costs of materials, giving a whole new meaning to tire inflation.
“I'm not so sure how much longer we can hold our prices,” DiCostanzo said. “But we're going to hold them until these rebates come into place.”
And though the high demand has been a boon to the industry, it's also created a shortage in the primary and secondary markets.
“We have a steady stream arriving every day, and we send them out almost as fast as they come in,” DiCostanzo said. “So while we don't have an unlimited supply, anybody can go to a Pedego store today and buy a Pedego electric bike.”
DiCostanzo mentioned that the company also saw more interest from entrepreneurs wanting to open Pedego stores over the course of the pandemic. Pedego doesn’t use a franchise model so instead, business owners can license Pedego's name and business processes at no cost in exchange for exclusively carrying Pedego’s products.
To date, there are nearly 200 independently-owned Pedego stores, which DiCostanzo considers the company's “biggest hallmark to success” because people can try new bikes in person and also have their bikes tuned up.
“Our original focus was the aging Baby Boomer looking to get some recreational fun,” DiCostanzo said. “If you were 50-plus, you were our target market because you had time, and you were looking to get some exercise, and you wanted to have some fun. And there's a social dynamic to it.”
But interest in cycling among younger generations has been growing, DiCostanzo noted: “We see 16-year-olds and 18-year-olds getting electric bikes."
And although you may encounter companies like UberEats delivering takeout by bicycle, demand for e-bikes from food delivery companies “are just a very minor segment of the market,” DiCostanzo said, though “an important one. Don't get me wrong.”
Grace is an assistant editor for Yahoo Finance and a UX writer for Yahoo products.