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Bloomberg – March 18, 2022
By Ira Boudway
The Pedego Electric Bike store in St. Louis normally closes for the month of February because there are not enough sales to justify keeping it open through the winter. This year, with an unusually large number of phone calls coming through, it re-opened early. February wound up being a “bonanza of a month” at the store, according to Pedego chief executive officer Don DiCostanzo, who oversees the e-bike brand’s 208 dealerships across North America. “We’re seeing a big spike in orders coming in way ahead of the season,” says DiCostanzo. “Every month there’s another record.”
Though he can’t prove it, DiCostanzo is convinced that rising fuel prices are driving sales. “I’m not going to tell you it’s all because of fuel,” he says. “But I absolutely believe it’s acting as a catalyst to get more people to consider alternate forms of transportation.”
Other e-bike brands and merchants in the U.S. tell a similar story: Sales are rising faster than expected, above already high expectations set by a pandemic boom. While the cause is hard to pin down — eased pandemic restrictions and the return to the office may play a part — most point to fuel prices as a contributing factor.
“I spend most of my day chatting with people that are either importers, brand managers or retailers of electric bikes,” says Ed Benjamin, founder and chairman of the Light Electric Vehicle Association. “And they’re already telling me that people are coming in and asking about and buying electric bikes as personal transportation.”
At Dutch e-bike maker VanMoof, sales over the past few weeks have been twice as high as the company’s projections. “We’re attributing that to rising gas prices,” says VanMoof co-founder and chief executive officer Taco Carlier in an email.
Gregg’s Cycle, one of the largest bike retailers in the Seattle area, just had its best February since it opened in 1932. “It was across the board, but e-bikes were a big percentage of that,” says longtime general manager Marty Pluth. “I think that was a result of the fuel hikes.”
Seattle e-bike startup Rad Power Bikes surveys its customers at checkout about their reasons for buying. An increasing number, according to co-founder and chief executive officer Mike Radenbaugh, cite rising fuel costs. “Just as the desire for safe and socially distanced transportation created another category of consumers for e-bikes, higher fuel prices do the same thing,” says Radenbaugh. “It layers growth on top of already fast growth.”
Electric scooter and e-bike sharing companies are also feeling the lift. Earlier this week, Bird Global founder and chief executive officer Travis VanderZanden said gas prices were helping to drive demand in the first quarter of this year. The company says it plans to unveil an ad campaign with the tagline “Give gas the Bird,” including billboards in New York City’s Times Square and in San Francisco, in the next few days. Bird’s chief competitor Lime, which operates in more than 50 U.S. cities, says the number of rides taken on its scooters and bikes was up by nearly two-thirds in February compared to last year.
For some, the frenzy is reminiscent of the Bike Boom of the early 1970s, when U.S. sales more than doubled in the span of four years, driven at least in part by gasoline price shocks. “History repeats itself,” says DiCostanzo, who worked pumping gas at the time.
To be sure, the situation then was more dire, with rationing and long lines at gas stations. “The frantic pace of bicycle sales during the Bike Boom was people who were thinking, ‘I’m not going to have any transportation,’” says Benjamin of LEVA, who worked assembling Schwinn bikes in Louisville, Kentucky at the time. This time around buyers simply want to save money.
“People right now are looking to avoid high fuel prices,” says Radenbaugh, “What are their options? A $70,000-to-$150,000 electric car that takes nine months to arrive isn’t very scalable and isn’t very inclusive.”