POTTED BATTERIES, NEW TARIFFS, AND BEWARE OF FAKE CLASS 2 E-BIKES

05-02-24: “There’s a new trend making electric bike batteries safer.” electrek:A new type of electric bicycle battery is gaining traction in the industry, potentially ushering in unprecedented levels of safety and security for riders. Get ready, because we’re quickly approaching the age of the potted e-bike battery. There’s no doubt that fire safety is an important subject when it comes to e-bike batteries. Despite the actual number of battery fires being incredibly low compared to tens of millions of e-bikes on the road, the lethal effects of just a single fire drive home the importance of the issue. Now, a new type of manufacturing process is growing in popularity, claiming to significantly increase the safety of e-bike batteries by reducing the risk of fires, even when the battery is abused or damaged. Potting, which uses a hardening resin poured between cells to isolate them from each other and the environment, can mitigate the two biggest factors resulting in fires: corrosion and physical damage.” “We recently learned from Pedego, a major national e-bike brand, that it was adopting new potted e-bike batteries that use heat-absorbing resin between cells. Potting the batteries and enclosing the cells in a thermally conductive material helps Pedego protect the battery from impact and puncture damage, and also helps dissipate heat more effectively.” “Pedego’s adoption of potted e-bike batteries follows quickly behind Rad Power Bikes’ announcement that it was introducing its own potted battery design. Neither are the first movers in this respect, with companies like Luna Cycle and Grin Technologies beating them by many years.” HPS Analysis: Potting has been employed in electronic components and consumer electronic end-items for decades, and it just took a little longer to get to the micromobility lithium-ion battery category – and it is a very good thing. While all the relevant testing hasn’t been completed, there is no reason, based on past knowledge and history, to doubt that it will prove to be very beneficial in many respects, including the prevention of thermal run-away events causing fires. However, it will take time for enough “potted” lithium-ion batteries to be entered into commerce to realize the full positive effect. So far HPS is aware of only two brands, Pedego and Rad Power Bikes, that have introduced potted lithium-ion batteries into their product lines. While we expect this to become a standard feature, it will still be several years before there is universal employment of potting throughout the micromobility market in North America. However, this is a very big step in the direction of public safety and acceptance of lithium-ion batteries for micromobility.

05-05-24: “Is the bicycle movement failing Santa Barbara? Ridership is decreasing, injuries are increasing.” By Daniel B. Fishbein, MD Santa Barbara Independent: “Despite large investments in bicycle infrastructure (paths, lanes, and tracks), Vision Zero, and bicycle purchases following COVID, bicycle ridership is decreasing and injuries are increasing in Santa Barbara – and much of the rest of the United States. Ridership. The number of people bicycling to work has fallen to the lowest levels since statistics were first collected in 2009. The downward trend began in 2015, long before COVID and the increase in people working from home. Rather, early in COVID, bicyclists joyously announced a surge in ridership. The fall in commuting to work does not appear to be accounted for by either the increase in people working from home.” “In the West Coast of the United States, cycling decreased 3 percent from 2022 to 2023. Injuries surged to 121 in 2023, the second-highest number on record. Hot spots for injuries are almost everywhere, even a few on the car-free parts of State Street. (Yes, sometimes bicyclists are responsible for bicycle injuries).“The decrease in bicycle ridership in Santa Barbara city is mirrored in the county, California, and many parts of the United States. There has been a precipitous fall in the bicycling bastion of Portland Oregon. New York City is the only major metropolitan area showing a sustained increase in ridership. Perhaps in part due to these disappointing trends, People for Bikes, Trek Bicycle’s nonprofit arm, stopped counting ridership and injury data, now focusing only on the miles and utility of bicycle paths.” HPS Analysis: What should we do?  Dr. Fishbein asks. Clearly, increasing bicycle infrastructure has had no effect in Santa Barbara, although it may have elsewhere.  Dr. Fishbein points out that constantly referring to Europe’s success in increasing ridership and decreasing deaths has also not accomplished anything. In much of Europe, in a bicyclist vs. car collision, the car automatically has to pay the victim. Try that out in American courts! As Dr. Fishbein points out, the bicycle movement in America must understand the complexity of our country’s automobile addiction. As much as bicyclists like bicycle lanes, bike paths, and trails, they have done nothing to increase ridership or safety. What can bicycling advocates, including bike shops, do? They need to figure out ways of discouraging automobile use other than building more bike paths. To show that bicyclists are changing, they could stop opposing helmet laws for adults. According to Dr. Fishbein, these laws have been shown to save riders’ brains and government’s money, and do not discourage bicycling. Bicyclists, including bike shops, could actively fight climate change in their communities. It’s one thing to advocate for bicycling, and it’s an entirely different thing to advocate for lifestyle change in your community. P.S., HPS knows that PeopleForBikes isn’t “Trek Bicycle’s nonprofit arm,” but finds it most interesting that Dr. Fishbein thinks it is.

05-13-24: “China’s sweeping new e-bike battery rules could have a major impact in U.S.” electrek: “As electric bicycles continue to grow in numbers in the US, so too have concerns over the safety of their lithium-ion battery packs. A new safety standard just passed in China may soon have a considerable impact on e-bike fire safety. E-bike battery fires, while exceedingly rare, have become a major concern in the U.S. with significant news coverage. NYC is often seen as the epicenter of e-bike battery fires due largely to the large population of e-bike delivery riders, and the low-quality Chinese batteries used on such bikes. Delivery riders’ e-bikes usually feature inferior-quality batteries in order to reduce costs to their owners, who use them to perform low-wage delivery jobs. Keeping the issue in perspective, more deaths in NYC are attributed to space heater fires each year than e-bike battery fires, but the rapid growth of e-bike use in the U.S. means that fire safety will continue to be a growing concern. With the vast majority of battery fires originating from poorly produced Chinese batteries designed for ultra-cheap e-bikes and e-scooters, it appears the Chinese government is attempting to address the issue head-on. The country just passed new technical standards for the production of lithium-ion batteries like those used in micromobility devices. Known as the ‘Safety Technical Specification for Lithium-ion Batteries Used in Electric Bicycles,’ the standards regulate the design, production, and sale of lithium-ion batteries for e-bikes. The regulations specifically address technical concerns relating to production quality and fire risk, and cover 22 specific aspects of the batteries’ design and manufacturing. Issues addressed include battery over-charging and over-discharging, external short circuits, thermal abuse, battery punctures, and several more key areas. Enforcement of the new standard is expected to begin on November 1, 2024. After that date, no lithium-ion batteries for electric bicycles will be permitted for sale in the country without conforming to the new standard. The standard currently only addresses the domestic market, which is much larger than China’s e-bike battery export market.” HPS Analysis: The vast majority of electric bicycles imported into the U.S. originate in China. While the 25 percent Section 301 punitive tariff on e-bikes that will go back into full force and effect June 14 will serve to cool the import volume from China, including lithium-ion batteries, it will be years before that volume drops below half of all e-bike and lithium-ion battery imports. The new Chinese e-bike battery standards will weed out and eventually eliminate the manufacture and exportation of hazardous lithium-ion batteries. HPS will be watching the impact of this new standard on and after it becomes the country-wide manufacturing testing and certification standard on or about November 2024.

05-14-24: “Your favorite bike company is struggling.” The Cycling Independent: As a lot of people are aware, things are not well in the velo-verse. The fundamentals (e.g. inventory to cash ratios) have been bad for nearly two full seasons, and while I think most inside the industry expected it all to shake out by the end of last season, things actually appear to be looking even worse than they did last year. Trek is massively cutting its product offering and laying people off. Cannondale laid people off recently. Rapha basically closed its U.S. office. Stages Cycling, maker of power meters, defaulted on their debts and got subsumed by Giant, to whom they owed millions. Giant is alleged to have more than 100,000 unsold bikes in the U.S. ENVE was broken off by its parent company and sold to private equity. Kona Bikes basically tanked, and their parent company is actively trying to sell them off. Popular online retailers Colorado Cyclist and Planet Cyclery are shutting down. And the hits keep coming. What’s causing it? To outline the basic problem, during the pandemic, while the world was closed down, humanity rediscovered bikes. Demand shot through the roof, and because many of the Asian factories were closed or running at diminished capacity, supply ran very short. At that stage, shops were selling everything they could get their hands on at full retail price. It was a genuine boom driven by a singular and unexpected event. Then the world reopened, and that was a good thing, except that the demand for bikes cratered. I believe this is what’s referred to as ‘reversion to the mean.’ As it turns out, the demand for bikes isn’t that variable, year-to-year. In 2023, industry revenue plummeted because everyone who wanted a bike had already bought one. The pandemic had simply caused several years of sales to be pulled forward into 2021 and 2022. Bike companies failed to foresee this precipitous drop-off in demand, so they forecasted and ordered WAY more bikes than they needed, creating an inventory glut and driving prices down. It would be easy to blame product managers and forecasters for this problem, but the factories allegedly forced their hands, basically saying “If you don’t order these bikes, you won’t get any.” It’s the macro-level equivalent of what bike companies have been doing to bike shops for decades, forcing them to inventory more products than they would choose themselves, and from there the results were predictable. So that’s the state of play, but as 2024 unwinds before us, the situation has gotten worse, even as inventory levels have started to drop. These are the reasons: First, inventory has dropped but it’s still way too high for most big brands. Second, the big players are all cash-poor, because they’re paying to float this inventory. Third, interest rates are high. Fourth, when you’re running negative cash flow, even the biggest players in the industry run low or default on debts. Fifth, because all the big players are holding prices down or extending spring sales, they’re basically stealing sales from the smaller players whose problems weren’t as big until now. So the situation has snowballed, even affecting the small domestic manufacturers who haven’t participated in creating the problem at all, but also can’t afford to discount their products to compete at the current, ludicrously lower price points. And of course, bike shops are suffering, because there is less margin for them in sales that are more deeply discounted. In a situation like this, weaker, debt-laden companies get snapped up by larger players or purchased by private equity groups on the hunt for distressed assets. None of that serves consumers, in my opinion. The massive discounting going on is going to entice a lot of people to buy bikes that either aren’t really right for them, or that they don’t really need, and that’s going to cascade into the used bike market, driving prices down there. So what does it mean in real terms? Well, I expect the acquisition and bankruptcy news to pick up steam through 2024, and it’ll be interesting to see what the landscape looks like at the end. There will be shocks. I’m sure of that. People are losing their jobs, and it’s reaching every corner of the industry. You know, it’s worth saying that even TCI is affected, because most companies we would normally approach for sponsorship have slashed their marketing budgets. Everyone I talk to seems convinced this will all work itself out by the end of 2024, and I definitely thought that two months ago, but now it’s May, so my great hope now is that we don’t lose good people and good companies to this thing largely beyond any of our own making. HPS Analysis: Well said. HPS recognizes this article is long, but it is, in our opinion, worth your time. Keep in mind – this well-researched article is from a cycling consumer publication and, in HPS’s opinion, does a better job than our industry association has done in summarizing the current, highly volatile and disruptive condition, and future of the American bicycle business.

05-16-24: “House approves lithium-ion battery standards bill – The legislation now goes to the Senate.” Bicycle Retailer and Industry News: “The House of Representatives approved the bipartisan Setting Consumer Standards for Lithium-Ion Batteries Act on Wednesday that would establish a federal safety standard for rechargeable lithium-ion batteries in mobility devices like e-bikes and e-scooters. H.R. 1797, which passed 378-34 and now goes to the Senate, would give the Consumer Product Safety Commission the authority to create that standard. The bill was introduced last year by New York Rep. Ritchie Torres, and endorsed by New York Sens. Chuck Schumer and Kirsten Gillibrand. The bill states the standard also must include requirements for battery-related equipment, including chargers, cables, battery pack external terminals, micromobility device external terminals, and free-standing recharging stations. A little over a year ago, Schumer and Gillibrand held a news conference pledging their support in the wake of New York City’s increasing number of lithium-ion battery fires. ‘We need coordinated federal leadership to mitigate the threat that unregulated and untested lithium-ion batteries pose to individual consumers and communities across America,’ said Matt Moore, PeopleForBikes policy counsel. ‘The Setting Consumer Standards for Lithium-Ion Batteries Act is a necessary first step towards a safer e-mobility future. We’re proud supporters of the bill and look forward to working with the sponsors in moving it through the Senate, to the president’s desk, and on to the CPSC to implement.’“ HPS Analysis: HPS has watched H.R1797 carefully, and been assured by representatives that CPSC is aware and supportive of the bill. This means the commission is in accord with fast-tracking promulgation of a mandatory federal standard for lithium-ion batteries for micromobility devices based on UL2271. There is little doubt, given the support of Senators Schumer and Gillibrand, that the Senate will act quickly to pass either H.R.1797 or a similar Senate version, and send this legislation to the president for signature, creating a law requiring CPSC to promulgate a mandatory lithium-ion battery regulation within one year of the legislation being signed into law. This should fast-track this portion of the electrical propulsion system regulation of e-bikes by three to six months ahead of complete e-bike regulations and revised pedal-only bicycle regulations which are now expected at the end of 2025. This will also set the stage for a preemption battle between CPSC with some of the states over conflicting state e-bike and lithium-ion battery regulations.  

05-22-24: “CABDA moves west show to Las Vegas for 2025.” Bicycle Retailer and Industry News: “The industry will return to Las Vegas for a trade show for the first time since the 2017 when CABDA hosts its west event in the Nevada city next March.

CABDA’s Jim Kersten said CABDA West, to be held at the Expo at World Market Center, will complement CABDA’s shows in Chicago and the New York City area. But Kersten didn’t sound opposed to turning CABDA West into something like a national show replacement for Interbike, which held its last Las Vegas show in 2017, followed by a 2018 show in Reno. ‘I’d love to put on just one show, believe me,’ Kersten told BRAIN at the National Bicycle Dealers Association Retailer Summit in Bentonville on Wednesday, where he announced the Las Vegas show. Still, Kersten said typically 90 percent of the attendees at CABDA’s shows are from within a five-hour drive of the venue. But it’s not unusual for retailers from farther afield to fly in, and Las Vegas is a convenient flight destination from virtually anywhere. ‘Las Vegas has been on my radar for years. It was a matter of finding an affordable way to hold it there. The World Market Center is a non-union event center — key for keeping costs low. It’s located off The Strip, between The Strip and the Las Vegas Downtown area.’ While Kersten said he’d like to produce just one event, he remains a proponent of regional shows, which evolve to suit their regions. Brands choose which show to attend based on their resources, market presence, and product emphasis. ‘I didn’t see a single studded fat tire at the west show,’ Kersten said. ‘And I didn’t see any beach cruisers at the Chicago event.’ The 2025 CABDA calendar swaps directions: instead of progressing west to east as the series has in recent years, it will kick off January 15-16 with CABDA East in Meadowlands, New Jersey, followed February 12-13 by CABDA Midwest in Chicago, and then CABDA West in Las Vegas March 26-27.” HPS Analysis: As both an attendee and participant as a seminar presenter in the CABDA Expos since the beginning, HPS is delighted to be going back to Las Vegas, whether it is a regional West Coast trade show, or the beginnings of a larger national trade show. Those who are regular readers are aware that HPS feels the global bicycle business has relegated the North American market to third-world status, and a major trade show in Las Vegas in March may be the beginning of the American bicycle market winning back the true respect that it deserves. NBDA has partnered with CABDA in producing the seminars at the Expos, and HPS is looking forward to continuing its support and working relationship with both organizations.

05-23-24: “Coalition protests against proposed e-bike regulations.” NJ Spot Light News as reported in LEVA Newsletter May 30, 2024: Bill would require registration and insurance for low-speed electric bikes in the state of New Jersey: “Members of more than 40 organizations gathered Wednesday to protest a bill (S-2292) that would require strict regulations for e-bikes in the state. The bill, sponsored by Senate President Nick Scutari (D-Union) and Sen. Vin Gopal (D-Monmouth), would require low-speed electric bikes and scooters to be registered with the New Jersey Motor Vehicle Commission. It would also ban the use of any unregistered e-bikes and scooters, and require owners to have insurance coverage. ‘Adding on an extra layer of cost just to ensure these level 1 e-bikes would really be a burden and would cut out not just people who do e-bike delivery, but anybody who, for any reason, cannot afford a car,’ said Karin Vernoppan of Bike JC. The coalition, made up of bike and pedestrian advocates, clean-energy groups, and members of the insurance industry, sent a letter to Scutari and Gopal highlighting what it calls the proposed legislation’s ineffectiveness and its inconsistencies with regard to the state’s goal of net-zero emissions. Gopal said he expects the bill will be amended, while Scutari offered no comment. The coalition wants to see a Vision Zero policy enacted across the state instead. ‘Jersey City has a great Vision Zero policy. They eliminated fatal crashes on Jersey City streets recently. And neighboring Hoboken has gone seven years without a fatal crash,’ said Corey Hannigan, active transportation program manager at the Tri-State Transportation Campaign.” HPS Analysis: While we currently do not know all the details, this New Jersey bill (S-2292) represents the confusion and misunderstanding between local, state, and federal agencies, and between bicycle associations and advocacy organizations that the current situation has fostered. The HPS partners and senior advisors have seen this before, when the CPSC mandatory bicycle safety regulation was first introduced, and after it was promulgated. There needs to be a clear distinction between product safety regulation of bicycles, as defined, and use regulations adopted and codified by local and state governments. The answer, that is still on the books, is absolute preemption. That is, preemption that clearly states that no state or political subdivision shall engage any bicycle (as defined) product regulation that is not identical to the mandatory federal regulation promulgated by the United States Consumer Product Safety Commission. HPS will probably be reporting on New Jersey S-2292 throughout June and in the July HPS Micromobility Reporter.

05-24-24: “NBDA Retailer Summit ushers in a new era.” HPS Micromobility Reporter June 2024: “The second annual NBDA Retailer Summit held in Bentonville, Arkansas May 22-23 was, by all measures, a great success and ushered in a new era of specialty bicycle retailer conferences in North America. Attendance was approximately 200 attendees, split almost evenly between retailers and associate members. The presentations were divided between main stage in front of the whole conference, and breakout sessions with smaller audiences that peeled back the details, and answered questions about the main stage topics and presentations. The after-hours networking sessions allowed attendees to discuss and exchange information and ideas. The NBDA is a sponsor of the Bentonville Bike Fest that immediately follows the conference, and opens a window to not only this type of event, but also to active bicycle riding participation for the conference attendees. Unfortunately, the Bike Fest was canceled this year due to a severe weather event, including tornados that hit Bentonville Friday night following the conference. The NBDA sent out the PowerPoint presentations and a questionnaire to all the attendees, and has already booked the same May dates for the 2025 Retailer Summit. HPS Analysis:  HPS took away two industry needs from the 2024 NBDA Retailer Summit. First, there has been a steady two-decade decay of actual bicycle rider participation in America. The bicycle business, and specifically bike shops, must craft new and comprehensive action plans to actively recruit more people of all ages, genders, and income levels to some form of bicycle (including e-bike) riding. Some important ideas were discussed at the conference, but need to be expanded, studied, and crafted into programs that can be implemented at the local bike shop and advocacy organization level. Second, there is a lack of accurate data that organizations large and small can use to craft strategic plans. It became clear that we as an industry are guessing too much, and that there is no common, collective foresight based on accurate data to take our industry into the near-term or long-term future. During the week after the Retailer Summit, the NBDA began looking critically at both of these shortcomings, and the opportunities they represent going forward.

05-30-24: “Section 301 punitive tariffs go into effect midnight, Friday, June 14.” NBDA Notice To Members and Associate Members:As you have read in BRAIN May 24, the U.S. Trade Representative announced that the exclusions from the Section 301 punitive tariffs on children’s bicycles, e-bikes, some carbon fiber frames, and water packs, which were scheduled to expire May 31, have been extended in a transition period until June 14. NBDA announced June 1t as the effective date, and this has been extended to June 14, 2024, after which a 25 percent punitive tariff will be imposed in addition to the regular tariffs on these items imported from China. 12-inch, 16-inch, 20-inch, and 24-inch wheel children’s bicycles are subject to a regular, long-standing 11 percent tariff, and after midnight on the June 14 an additional punitive tariff of 25 percent will be imposed on the FOB value of children’s bicycles originating in China, resulting in a total tariff of 36 percent.

E-bikes are not subject to any regular tariff, so after midnight on June 14, a punitive tariff of 25 percent on the FOB value of e-bikes originating in China will be imposed.

Import tariffs are paid by the importer of record within 10 days of the goods clearing U.S. Customs. In 2023 over 88 percent of all pedal bicycles were imported into the U.S. from China. While there are only estimates for e-bikes, the NBDA assumes over 80 percent of all e-bikes were imported into the U.S. from China. The additional 25 percent imposed on the FOB value after midnight June 14 on children’s bicycles and e-bikes originating in China is going to create a cash-flow problem for some brands because of U.S. Customs 10 day cash payment terms. NBDA renews its caution for members to be alert for wholesale and MSRP price increases on children’s bicycles and e-bikes, and changes in terms because of the reimposition of the 25 percent punitive Section 301 tariffs.” HPS Analysis: Section 301 punitive tariffs go back into full force and effect at midnight June 14 with a 25 percent additional import duty on 12-inch, 16-inch, 20-inch, and 24-inch wheel children’s bicycles originating in China, a total of 36 percent on the FOB value and 25 percent on e-bikes originating in China. This is not only inflationary, but creates potential cash flow problems for importers of record who must pay the 301 tariff duty, in cash, within 10 days of importation. 25 percent of an average $1,200 FOB value of a Chinese manufactured e-bike is $300 x 200 units in a 40-foot container = $60,000 additional cost per 40-foot container of e-bikes imported into the U.S. from China on and after midnight June 14, 2024. An estimated 80+ percent of all e-bikes imported into the U.S. originated in China at a total estimated FOB value of $1,188,000,000 is an additional $297 million in import duty per year! Some wholesale distributors are currently considering immediate price increases to retailers to try to get as much additional profit out of their current inventory as possible before they start paying the additional punitive tariffs. Smart retailers who have both the cash and credit line will take immediate action to purchase inventory that wholesale distributors have on-hand at the lower prices before the 25 percent is added to inbound shipments. Some wholesale distributors will refuse to ship or give any terms on inventory on hand to block retailers from purchasing before prices increase. The additional cash flow burden of having to pay U.S. Customs an additional 25 percent on the FOB value of children’s bikes and e-bikes will result in a reduction in terms offered to retailers, and some wholesaler financial difficulty and possible bankruptcies. The reaction of consumer demand to retail price increases on children’s bikes and e-bikes is not yet known, but we anticipate that it will be negative. Children’s bikes and e-bikes imported from countries other than China will have a price advantage in the American market going forward, but limited supply will cause shortages and out-of-stock problems from July forward.

05-31-24: “CPSC electronic filing of regulatory standard testing certifications of compliance.” Notice to NBDA Associate Members: “On or about September 1, 2024, CPSC will publish its final Rule for Electronic Filing of Regulatory Standard Testing Certification. On or about January 1, 2025, CPSC will promulgate the final mandatory rule covering all consumer products regulated by CPSC, including bicycles as defined in 16 CFR 1512. HPS and the NBDA can provide a CPSC PowerPoint file that contains a complete list of the consumer products covered by the eFiling Rule, including:

  • Products Requiring a Children’s Product Certificate:
    • Bicycles (Youth)
    • Bicycle Helmets (Youth)
  • Products Requiring a General Certificate of Conformity
    • Bicycles
    • Bicycle Helmets

“As a reminder, a bicycle is defined by CPSC in §1512.2 as either (1) a two-wheeled vehicle having a rear drive wheel solely human-powered; or (2) a two-or three-wheeled vehicle with fully operable pedals and an electric motor of less than 750 watts (1 h.p.), whose maximum speed on a paved level surface, when powered solely by such a motor while ridden by an operator who weighs 170 pounds, is less than 20 m.p.h. From a use standpoint, this product safety definition includes what is referred to as Class 1 and Class 2 e-bikes. Slide 19 from the CPSC PowerPoint file lists contacts at CPSC who can answer questions, and you can also contact your import broker. HPS Analysis: We urge importers of bicycles as defined in §1512.2 to join the eFiling Pilot Program as soon as possible in preparation for promulgation of the Mandatory Rule by CPSC on or about January, 2025, seven months from now. Please contact CPSC, or your import broker or HPS, and we will do our best to help you.

June 2024: “Retailers (and others) should beware of ‘Class 2’ e-bikes.” Guest Editorial by Bob Mittelstaedt, Bicycle Retailer and Industry News: “Beware of electric throttle two-wheelers masquerading as Class 2 e-bikes legal for children to ride. Selling them is not only dangerous to children, it is illegal and exposes retailers to lawsuits. Far from legalizing them, the industry’s approach of calling them “out of class” EVs highlights that they are not legal e-bikes. In this context, Sports Basement, a large California retailer of Super 73s, has discontinued selling that brand. A prudent retailer would be well-advised to consult with its lawyer and follow Sports Basement’s lead. To explain, let’s start with the basics. Most states have adopted the PeopleForBikes model legislation. Of the three classes of e-bikes, the only possible class for a two-wheeler with a throttle is Class 2. But that classification fits only if the motor is less than 750 watts and is not ‘capable’ of providing assistance above 20 m.p.h. If the motor in any gear or mode is capable of working above 20 m.p.h., it is not an e-bike. It’s a type of motor vehicle. This matters because e-bikes can be ridden by children under 16, but a motor vehicle can only be ridden by a licensed rider. States impose other regulations on motor vehicles, like registration, insurance, and safety equipment requirements.” “The model legislation requires not only manufacturers but also ‘distributors’ to ‘apply a label that is permanently affixed, in a prominent location, to each electric bicycle.’ It must contain the accurate classification, top speed and motor wattage, printed in Arial font in at least 9-point type. If someone is injured or killed, the lawsuit potential is even more serious. Check your contract with the manufacturer for indemnities. See if its insurance or yours covers this situation. And consider not just the legalities, but the morality of selling dangerous products to children.” HPS Analysis: For clarity, this is not a condemnation of Class 2 e-bikes, or e-bikes equipped with a throttle, per se. The class system is a use system, for the use of riders of e-bikes. For the product safety regulation of e-bikes, Section 38 of 16 CFR 1512 defines a low-speed e-bike as a “two or three-wheeled vehicle with fully operable pedals and an electric motor of less than 750 watts (1 h.p.) whose maximum speed on a paved level surface, when powered solely by such a motor while ridden by an operator who weighs 170 pounds, Is less than 20 m.p.h. Low-speed e-bikes that do not comply with 16 CFR part 1512 are “hazardous substances” under section 2 (f) (1) (D) of the FHSA, and are also “banned hazardous substances” under section 2 (q) (1) (A) of the FHSA. A throttle is allowed, and this definition embraces, as Mr. Mittelstaedt states, Class 1 and Class 2 from the use system. The problem is the confusion that the class system creates and, as Mr. Mittelstaedt points out, the so-called “out of class” e-bikes that do not fall within the Section 38 definition we cite above. This is important because the bike shop channel of trade is at a critical juncture relative to stocking and selling both e-bikes with mid-drive torque sensing systems and e-bikes with throttles, or both Class 1 and Class 2 e-bikes that are within the Section 38 definition. HPS agrees with Mr. Mittelstaedt as concerns the so-called “out-of-class” e-bikes, and the potential hazard they represent to children and some adult riders as well. As he points out, “Over a year ago, the industry acknowledged the illegality of these mislabeled ‘out of class’ EVs or OCEVs. To quote PeopleForBikes’ January 2023 memo to industry, ‘those with motors in excess of 750 watts and/or which can greatly exceed 20 m.p.h. on motor power alone … [are] not electric bicycles. These products are often advertised misleadingly and sold to the public as e-bikes and represent a threat.’ Mr. Mittelstaedt goes on to state, “QuiteKat tries another approach for its vehicles with motors larger than 750 watts and capable of working above 20 m.p.h. Instead of affixing a permanent label as the state laws require, it says the rider picks their own class on the display. When this violation was brought to PeopleForBikes’ attention, it declined to comment to E-Bike Access “… because OuietKat is owned by one of our members.” Bob Mittelstaedt is a resident of Marin County and a retired trial attorney. He is co-founder of E-Bike Access (www.ebikeaccess.org).

Contact Jay Townley: jay@humanpoweredsolutions.com

ARE E-BIKES REALLY A GOOD THING?

It’s tough to be an ogre! I imagine they will be coming for me with torches and pitchforks soon. Let me explain.

Let’s be honest — the bike business is hurting. There was a mini-boom during and right after the pandemic as people were looking for ways to get out and do things, something that wouldn’t necessitate being in a crowd, something that got them outside, something that would allow some travel, albeit limited in distance by how far they could pedal out and back.

As a result, the manufacturers, distributors, and dealers got a little euphoric in their expectations and forecasts. That caused a supply chain issue. Parts to make the finished product and the finished product itself could not be produced quickly enough to meet the perceived continuing demand. Then the demand dried up, leaving a HUGE bulge in the supply chain, with no demand to absorb that much product. Now it seems ridership has fallen, in some cases below pre-pandemic levels.  

You already know this. There has been some enthusiasm that e-bikes will help the business come back to what it once was. There may be logic to that as manufacturers, distributors, and dealers have experienced a significant uptick in e-bike sales. Certainly, the associated dollar volume of e-bike sales has helped. Is this what’s going to help the business get back to where it was? 

Actually, I’m not sure the availability and increased sales of e-bikes haven’t hurt the industry more than it helped. Heresy, I know, hence the mention of torches and pitchforks above.

Mr. Dealer, how many $4,000 to $5,000 or even higher-priced e-bikes have you sold so far this year? How many sales are in your 2024 business plan? How many did you sell in the past couple of years? How many of the people to whom you sold those bikes have come back and bought another e-bike? Or have come back and bought an analog bike? How many have come back with their kids and bought an e-bike for them? Or an e-bike for a spouse/significant other?  

Is this enthusiasm towards e-bikes bringing the industry back real or imagined?

Downstream, kids see their parents riding e-bikes more and more. Typically, kids want to emulate what their parents have and do. I submit it’s going to be harder and harder to get the next generation interested in and on analog bikes.

I know, the rationale is that e-bikes are good for the environment as riders will use them instead of their cars for shorter trips. If more people are on two wheels, because e-bikes take the strain out of regular bicycling and get used instead of cars, that’s a win. Got it. Only my observation is I don’t see many (any?) e-bikes out front of the grocery store when I go, or the Post Office, or at the barber shop, or picking the kids up at school. But the parking lots are always full of cars.

What I do see is an increasing number of golf carts at these places, golf carts that aren’t really golf carts, that seat four to six people with seat belts. Golf carts that have large baskets to hold packages. Golf carts that have headlights, mag wheels, and turn signals. Golf carts that are electric and really are being used instead of a car. I also see a significant increase in parking spots specifically for golf carts. In an acknowledgment of the times, I saw my first handicapped golf cart parking space earlier this week.

Yeah, you say, but those things are expensive. And a $5,000 e-bike that can be used only by a single rider isn’t? I saw a TV ad last week by a golf cart dealer who was selling four-person carts for $3,250, less than a lot e-bikes.

It’s been said video games are replacing the interest in analog bicycling in the next generation. That may still be partially true, but I submit it’s e-bikes, and/or more and more families getting golf carts, that should be considered as contributing causes. Golf carts are being driven not only by parents, but by kids who should be riding bikes. Golf carts are expensive, but when weighed against the cost of an e-bike for each kid, it becomes a more palatable expense. Mom and dad get another conveyance, and the kids get to feel more grown up driving it around with their friends.  

It’s always easier to sell the consumer what they want instead of something they don’t, even if is less expensive. The hype around e-bikes has played into that ethos. It also means there likely will be fewer sales albeit at higher prices. That doesn’t help the sales of analog bikes. How many times has a customer come into your store wanting to buy an e-bike and left with an analog bike?     

Let’s recap. E-bike sales have cooled along with analog bikes. The cost of e-bikes has soaked up a lot more disposable income than what used to be spent for non-electric bikes. Kids aren’t as interested in analog bikes because of the availability of e-bikes so analog bike demand has waned significantly. Plus, golf carts are becoming much more ubiquitous, another analog bike replacement and upgrade. Maybe e-bikes have not actually been as good for the bicycle industry as everyone thinks. It has not been a one-to-one trade of an analog bike to an e-bike. If anything, it is possible the demand for analog bikes will continue to decline because of it.

Uh oh … I think I hear the mob pounding at the castle gate.

Contact Steve Bina: steve@humanpoweredsolutions.com