The German car industry was late to jump on the electric bandwagon, but the country is at the forefront of the booming e-bike industry – a position likely to be boosted by tougher tariffs the European Union has just imposed on China.
Long burdened with a reputation as geriatric transport, e-bikes have become cool status symbols, with adventurous new models ranging from electric mountain bikes to road racers. In Germany, where a record 4 million bicycles were sold last year, one in five was electric, translating into sales of €2.7 billion ($3.07 billion).
In a few short years, every third cycle sold will be battery-driven, predicts bike manufacturers’ industry association ZIV. Says Siegfried Neuberger, ZIV's general manager: “E-bikes are the growth and innovation hub of the German bike industry.”
Although design, branding and sales are solidly domestic, three-quarters of all bikes sold in Germany, e-bikes included, are produced overseas. But that trend may soon backpedal, with some regulatory help from Brussels.
Raising the shields
Effective last Saturday, the EU implemented long-term tariffs on Chinese e-bikes of between 18.8 and 79.3 percent, aimed at stopping the dumping of cheap Chinese product. The measure, which applies for five years, broadly confirms provisional EU tariffs laid down last July that created a separate duty for e-bikes.
That represents a hefty rise from 1997, when the EU laid down a 48.5 percent surcharge on bicycles and bicycle parts made in China, subject to various exemptions.
European manufacturers applauded the tougher tariffs, but warned that Chinese e-bike producers were already making their way to the continent via third countries, where they were being repackaged.
In some respects, the German bicycle sector resembles the country's beer industry: It boasts around 40 manufacturers, with a couple of dominant large-scale producers and a host of quality specialists at the top end of the market. Most have frames manufactured overseas for assembly in specialist German plants, although technologies like 3D printing are starting to change that.
Big market players include Cube Bikes, which employs around 500 staff to manufacture more than half a million bikes a year, half of them electric. Estimated annual turnover is a solid €400 million. Dutch-owned Derby Cycle is another heavyweight, producing 100,000 e-bikes at its base in northern Germany, including the popular Kalkhoff brand. It claims to have been the first manufacturer to make its own e-bike engines with coaster brakes, starting in 2011.
As elsewhere, factory automation is making rapid inroads into e-bike production, while changing the industry’s geography. Especially for high-end models, European manufacturers can now achieve margins similar to those overseas, once labor, transport and tariff costs are included, says Georg Honkomp, head of the Cologne-based ZEG group, Europe’s leading bike wholesaler and a significant producer in its own right.
In 2017, ZEG acquired Biketech, a Swiss e-bikemaker. Meanwhile, Riese & Müller, a deluxe e-bike maker located near Darmstadt in central Germany, is switching frame production from Taiwan to Portugal.
Even old East German bike manufacturers are finding a new lease on life in the buoyant climate. Venerable East German brand Mifa, which twice filed for bankruptcy in the last four years, has risen again as Sachsenring, which this year hopes to produce 200,000 bikes – of which 70 to 80 percent will be battery-powered.
Reinventing the two-wheeler
The other big German success story in the sector is in e-bike motor systems, where giant auto-parts supplier Bosch is superbly positioned. Ten years ago, the company launched a subsidiary for e-bike motors, backed by know-how from Bosch's battery manufacturing and on-board computing divisions. Bosch eBike Systems is now the undisputed market leader, with an estimated valuation over €1 billion.
Internationally, Bosch faces competition from Yamaha and Shimano, as well as a number of German car industry suppliers keen to replicate its exceptional success. Brose, which supplies more than 200 million electromotors for car doors and seats annually, now makes motors for more than 30 e-bike brands. Two further German car industry suppliers, Marquart and Mahle, have also made moves into the market.
The widening overlap between cars and electric bikes is causing a “car-ification” of bicycle technology. A crucial chapter in the evolution of the bicycle, it's not entirely without drawbacks. The increasing complexity means the days when cyclists could easily maintain their own bikes may be drawing to a close.
Katrin Terpitz covers companies and markets at Handelsblatt, focusing on family-owned businesses. Florian Kolf leads the publication's trading and consumer desk. The article was adapted into English by Brían Hanrahan. To contact the authors: [email protected], [email protected]