Electric motorcycles are on the rise – huge potential market

Electric motorcycles are on the rise - huge potential market.

“Electric motorcycles can also run innovative companies like Tesla.”

“It’s a good time to start a business to make electric motorcycles.”

Today, the dividend of electrification in the automotive sector is spilling over to the e-bike and electric motorcycle sectors, and eventually there will be a “new force” like Tesla.

Investors are also starting to bet on electric motorcycles.

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    Some investors are looking for Tesla in the field of electric motorcycles

    In early June, Paidian, a developer of smart electric motorcycles, received a RMB 100 million investment from Hygoal in the A round, and its Pre-A round investment of nearly RMB 100 million early last year came from Lenovo.

    First-tier investment institutions related sources said that the global motorcycle market capacity is about 60 million units, of which about 92%-95% belong to fuel motorcycles, so the potential for electric motorcycle replacement is large.

    Similar to the electric vehicle industry chain, China’s electric motorcycle industry chain also belongs to the world’s first-class level, so electric bikes and electric motorcycles are China ‘s choice in the international market.

    Electric motorcycles are not the “electric bikes” that used to be available without a license plate, but are in fact motor vehicles that require a license to ride.

    For most people, the easiest way to distinguish an electric bike from an electric motorcycle is to see if there is a “pedal ride” function – if the vehicle can be pedaled like a bike when the battery is dead, it is an electric bike, otherwise it is an electric motorcycle.

    Some investors are looking for Tesla in the field of electric motorcycles

    There are two types of electric motorcycles: electric mopeds and electric motorcycles, the former of which cannot be driven at speeds greater than 50 km/h.

    Most of the newly established electric motorcycle companies in recent years have chosen to make mid- to high-end electric motorcycles, and are therefore receiving attention from venture capital.

    According to professional analysis, Chitu received an angel funding round from K2VC two years ago and is currently seeking new funding as well.

    Its founder said that investment institutions are also basically following the evolutionary path of electric vehicles to layout, including vehicle manufacturers and industry chains.

    From a timeline perspective, there has been an accelerating trend in electric motorcycle investment and financing events since the second half of last year.

    In September 2022, Shawan Technology closed a Series A round of $10 million led by Maison Capital, which has already established operations in Southeast Asia and Europe.

    The rise of electric motorcycles

    At the end of last year, Horwin also completed a RMB 100 million angel funding round with XVC as the investor.

    In March, SWAP, a Southeast Asian electric motorcycle brand, completed a US$10 million Pre-A+ round led by Ondine Capital and other investors including Kejora-SBI and New Energy Nexus, among others.

    Including this round, SWAP has completed as many as four funding rounds in less than two years since its inception.

    Another star electric motorcycle project, Davinci Motor, has also completed six rounds of financing, with its latest round involving Xinhui Capital, and the company’s website shows that its first product, the DC100, has an “intent to buy” price of $177,700 and is now available for pre-order.

    The company’s website shows that its first product, the DC100, is available for pre-order for $177,700.

    The angel round was completed at the end of May 2021, valuing Davinci motor vehicle at $ 500 million.

    It is said that in April this year , a new round of financing was launched. The valuation has soared to 8 billion – 10 billion yuan.

    In addition, Tromox and One Moto have also completed a new round of financing this year.

    Incomplete statistics show that well-known institutions, including K2VC and Yingke Capital, have laid out electric motorcycle tracks in search of “Tesla” in the electric motorcycle industry.

    The rise of electric motorcycles

    When the new power of electric motorcycles is rising, similar to the auto industry, traditional electric motorcycle players are not idle.

    Traditional electric motorcycles can be divided into two categories.

    One is electric two-wheelers converted into electric motorcycles, such as Yadea and Aima, and the other comes from fuel motorcycle manufacturers.

    In early June, Yadea partnered with Porsche to launch an electric motorcycle in Europe priced at up to €6,000, which has a maximum range of 80 miles (about 130 kilometers) on a single charge.

    Another electric vehicle giant, Aima, dropped $1 billion almost two years ago to work on an electric motorcycle project in Taizhou, Zhejiang province, China.

    Tailg is also partnering with Thailand to promote the electric motorcycle business in Southeast Asia.

    In addition to these manufacturers of electric two-wheeled vehicles making a big push into electric motorcycles, traditional fuel motorcycle players are also accelerating their deployment.

    VF F200 electric motorcycle

    CFMOTO, a listed Chinese motorcycle company, has developed a “smart+electric” development strategy similar to that of the auto industry.

    Perhaps the most radical is Harley.

    Last September, Harley’s electric motorcycle division, LiveWire, went public as SPAC, becoming the first publicly traded electric motorcycle company in the United States, with a current market value of about $2 billion.

    BMW has also said that its urban mobility lineup will be fully electric by 2030.

    As a typical Japanese motorcycle player, Honda resembles the cautious posture of Japanese cars when it comes to electrification.

    It’s not hard to understand – Honda wants to preserve its existing profitable fuel car business, while also going electric for a relatively long time (stopping production of fuel motorcycles in the mid-1940s).

    Predictably, there will be inevitable competition between traditional electric motorcycle players and new electric motorcycle powerhouses.

    But the new forces are not afraid of these traditional motorcycle players.

    Electric motorcycles are in a period of rapid development

    The technical threshold of electric control is relatively high, and electric motorcycle electric control research and development requires cross-border talent, which is difficult for traditional electric motorcycle players.

    Some professionals point out that the reason for the hot electric motorcycle market is that it is smaller than an electric car, yet larger than an electric bicycle, and the substitution effect is obvious.

    Also, the market size is substantial, up to 60 million units.

    China and the international market may each account for half of the market.

    The international market is mainly Europe and the United States, as well as Japan, India, Southeast Asia, etc.

    By 2027, the penetration rate of electric motorcycles is expected to reach 20%.

    Horwin co-founder and COO Liu Ping also expressed a similar view.

    By 2027, the penetration rate of electric motorcycles in China will increase from the current 20% to 50%, and the international market will also increase to 20% to 30% in the next few years.

    The development of electric vehicles has led to the gradual emergence of the scaling effect of power batteries, and battery costs are beginning to fall.

    Electric motorcycles are in a period of rapid development

    “It may take 2-3 years for this dividend of cost reduction to be transferred to electric motorcycles,” he said, adding that electric vehicles are now gradually entering the phase-out period and electric motorcycles are just about to enter the period of rapid growth.

    Even after 2030, electric motorcycles will still develop at a high speed because the electric replacement of the motorcycle industry is already irreversible.

    Because of China’s electric motorcycle policy, some professionals do not consider it friendly.

    There are no legal barriers, but mainly some cities may ban electric motorcycles.

    This is one of the reasons why some electric motorcycle startups are focusing their business internationally.

    And similar to the Chinese electric car chain, the electric motorcycle chain is also very beatable,” said the founder of the famous manufacturer.

    International users are concerned about the performance of the car, which is our strength, and also the logic of competition is completely different from the previous engine era, and the inquiries and offers we receive are currently growing exponentially.”

    The above-mentioned first-tier investment institutions also said that investors are concerned about electric motorcycles, mainly related to the travel scene.

    “For example, in the sinking market, there is a general travel scenario where it is not cost-effective to take a taxi and too far to ride a bike, which is an opportunity for electric motorcycles.” For some additional information, you can check the top 9 budget electric motor bike for reference.

    He said places like Southeast Asia, which was originally a major motorcycle market, are now facing the trend of electric substitution.

    Perhaps in the near future, electric motorcycles could run out of innovative companies like Tesla.

    Picture of Chocolatezhu
    Hi, I'm an experienced writer about mechanic and an expert on bike and e-bike tech who appreciates practical, beautifully-engineered things. And of course, I love cycling.
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