2/28/23 Trying to replace china’s supply chain? Don’t bother. Vietnamese factories were supposed to save globalization. It doesn’t look like that’s happening. Bloomberg. So much for the great Vietnamese supply chain that was supposed to replace China’s and save globalization. HPS Analysis: American brands, and in particular the multinationals, are finding it extremely difficult to extract themselves from mainland Chinese supply chains, and the Japanese, Taiwanese, Chinese bicycle manufacturing consortium. Vietnam, Cambodia and Thailand all looked promising before the pandemic, but their respective infrastructures and labor forces simply cannot sustain U.S. demand, even at reduced levels.  

2/28/23 Walmart partners with Citi on new supplier loan platform. Chain Store Age. Walmart’s latest fintech solution is aimed at small-to-medium-sized businesses (SMBs) in its supplier network. Walmart is connecting 10,000 U.S. SMBs with 70 lenders that provide qualifying businesses with loans of up to $10 million. HPS Analysis: Small-to-medium-sized U.S. suppliers to Walmart, like Kent International, now have access to loans up to $10 million. The U.S. bicycle business would be well advised to connect with its lenders to find out how it can emulate this loan platform.

2/28/23 Target Q4 sales, profits top estimates; gives cautious outlook as spending shifts. Chain Store Age. Target Corp. beat fourth-quarter expectations amid a “very challenging environment,” and said it plans to expand its owned brands as consumer spending shifted away from discretionary items. HPS Analysis: The second-largest retailer of bicycles in the U.S. has worked out of its inventory issues, and is warning about consumers shifting away from discretionary items to lower-cost private label products in a very challenging retail environment.

3/1/23 CPSC: The industry’s 3-class e-bike framework is not part of our statutes. Bicycle Retailer and Industry News. Consumer Product Safety Commission Chair Alex Hoehn-Saric told BRAIN the agency doesn’t recognize the industry’s three e-bike classes, but instead treats the regulation of e-bikes on a case-by-case basis. HPS Analysis: Manufacturers and brands should rely on the CPSC definition of a “bicycle” for testing, regulatory compliance and insurance, and not the three-class designations.

3/2/23 NY City Council passes lithium-ion battery safety package. Bicycle Retailer and Industry News. E-bikes will soon need to meet UL 2849 or similar certification, and batteries UL 2271. In order to be legally sold, rented, or leased in New York City, an e-bike needs to be certified to UL 2849, which is a standard that covers an e-bike’s full electrical system, including the battery, charger, and motor. Likewise, a powered mobility device needs to meet UL 2272, and all lithium-ion batteries sold separately must meet UL 2271. The NY City regulation goes into effect 180 days after enactment. HPS Analysis: New York City took appropriate action in the face of fires, injuries and deaths resulting from a recent influx of highly-questionable lithium-ion battery-powered micromobility products sold directly to consumers, and originating in China. The de minimis exception to U.S. law and customs regulations is one of the major problems allowing questionable products into the U.S. Testing, compliance and listing to UL 2849 and UL 2271, as well as CFR 1512 for all bicycle products as defined by CPSC, is essential from this point forward.

3/3/23 Top executives tackle biggest bike industry challenges at the 2023 Bicycle Leadership Conference. Bicycle Retailer and Industry News. PeopleForBikes’ 2023 Bicycle Leadership Conference (BLC) took place March 14-16, in Dana Point, California. It was a three-day event bringing together CEOs and other top executives from across the bike industry to network, learn, and tackle the biggest challenges and opportunities facing bicycling and the bike business. HPS Analysis: We received the agenda March 3, but beg to differ that the agenda was designed to “… tackle the biggest challenges and opportunities facing bicycling and the bike business.” We carefully read the agenda, and for the kind of coin this BLC cost attendees, we suggest a different focus at future conferences, with as much data as possible about why American consumers have reduced purchases of new bicycles (inclusive of e-bikes), how we integrate all styles, types and retailers of e-bikes into the bicycling community of interest, and how we shift our industry advocacy to meet the wants and needs of all bicyclists of all types.  

3/4/23 Over $30M worth of Funkos are being dumped. NPR Business. The maker of the Funko Pop! Collectables, plans to toss millions of dollars worth of its inventory, after realizing it has more of its pop culture figurines than it can afford to hold on to. HPS Analysis: According to this article, diminishing demand combined with a glut of inventory, is “driving the loss,” and the company’s decision to toss $30 million worth of product into the dumpster. While we think this is one of the dumbest ideas we have ever heard of, it is the result of accounting practice and tax law that makes this bad idea feasible for managers to execute. It also emphasizes just how evil inventory can be, and how bad a shakeout can be.

3/4/23 What New York’s e-bike law will mean to retailers. Bicycle Retailer and Industry News. Heather Mason, president of the NBDA, is advising bike shops in New York City to sell off any e-bikes that aren’t certified to UL standards before a new local law takes effect. HPS Analysis: Bike shops in NY City have six months, to sell existing inventory of e-bikes, which as Mason points out is more than reasonable. This anticipates two inventory turns per year, which is more than possible, even in a slow market. Concerns expressed in the article about brands not having enough time for testing and certification is also over-blown, given the number of qualified and listed testing laboratories in Asia and the U.S. Also, many e-bike system component manufacturers have already had their products tested, which means testing of complete systems will proceed quickly, and at affordable costs. This all means that in 180 days, NY City bike shops will be able to tell shoppers and customers that they are selling e-bikes that are certified to UL 2849, and if simple instructions about use, storage and charging of the lithium-ion batteries are followed, they are safe and enjoyable consumer products.

3/7/23 Vail closes 19 retail locations in Colorado. Bicycle Retailer and Industry News. Vail Resorts is closing 19 retail locations in the Colorado mountains. Most of the locations offered winter sports sales and rentals, but several also offered bike sales and rentals. The closures will cost 69 workers their jobs. HPS Analysis: It is always sad to hear about retail locations closing. This recent closing of eight Aspen Sports stores and demo locations in Aspen, six Telluride Sports locations, and Burton and Neve stores in Telluride, along with a Patagonia store in Snowmass, calls into question the business strategy and financial condition of the parent company.

3/9/23 Manufacturer refuses to recall $13 helmet sold at Walmart, CPSC says. Bicycle Retailer and Industry News. The Consumer Product Safety Commission is warning consumers to immediately stop using and destroy TureClos bike helmets, sold on last year, because they do not meet federal safety standards. The CPSC says the China-based seller of the helmets has refused to recall the helmets or offer consumers any remedy. HPS Analysis: This is the avarice of business at its worst. When Congress amended the Consumer Product Safety Act and took power away from CPSC to protect American consumers in favor of allowing businesses to make as much revenue and profit as possible, it sadly set up situations like this. All sellers, including Walmart, have an obligation to the safety of American consumers to take responsibility for the merchandise sold under their trade names.

3/10/23 Giant Group revenues up 12.5 percent in 2022 despite inventory challenges. Bicycle Retailer and Industry News. Giant Group’s revenue was up 12.5 percent, but net income before taxes was flat, and net income after tax was down 1.5 percent. The company said it still has excess inventory, but demand remains high for e-bikes and high-end bikes. HPS Analysis: The article also quotes Giant Group as saying: “At present, the balance of the supply and demand of the bicycle market has yet to be normalized.” The company said it took a ‘corrective mechanism’ to reduce inventory in the second half of 2022, but inventory reduction is still slow. In other words, Giant Group still has an inventory overhang that it is working at reducing at the end of the first quarter of 2023.” 

3/11/23 Silicon Valley Bank failure could have wiped out ‘a whole generation of startups’ NPR Technology. For tech startups, which for decades have relied heavily on Silicon Valley Bank (SVB), the bank failure set off a crisis that could have led to mass layoffs, or hundreds of startups collapsing, according to industry insiders. The government did step in to guarantee deposits, apparently rescuing well-known tech companies including Shopify, Pinterest, Fitbit, and thousands of lesser-known startups, in addition to established venture capital firms, like Andreessen Horowitz. HPS Analysis: If you had never heard of Silicon Valley Bank before this week, you likely have by now. According to Bloomberg, SVB was home to cash belonging to half of all venture-backed startups in the U.S. The question HPS is asking is: how many e-bike start-ups would have been affected by the SVB bank failure, and how many bike businesses have significant assets in other highly-leveraged banks? Our analysis indicates SVB was the victim of the Fed’s increased interest rate that in turn effected the value of SVB bonds, leading to the current financial melt-down and failure. The American bicycle business is relatively low-tech, and didn’t pay much attention to the SVB failure, as evidenced by the total lack of coverage by BRAIN. However, HPS confirmed that at least one of the “new” e-bike start-ups had all of its venture capital (VC) funding deposited with SVB, and could not get to its money to make payroll March 10, like a whole bunch of other start-ups with their VC funding frozen. While the news that the government stepped in was very welcome by all concerned, it pointed to another potential financial problem relative to the excess inventory being held by brands and suppliers, that may be overvalued.

3/11/23 What’s driving the battery fires with e-bikes and scooters? NPR Technology. As firefighters battled a five-alarm fire at a supermarket in the Bronx earlier this month, New York City officials gathered beside what they said was the cause of the fire: the blackened shell of what was once a sit-on electric scooter. “There is extraordinary damage. This entire building behind me is completely destroyed. The roof is caved in. There is nothing left. And it is all because of this one single bike,” said Laura Kavanaugh, the city’s fire commissioner. HPS Analysis: While it is clear that the cause of this devastating fire was an electric scooter, e-bikes are being painted with the same brush. Thank goodness there was no fatality. The recently-passed NY City law requiring testing and certification to UL 2849 is referenced in the article, as is the fact that CPSC is aware and in constant communication with NY City about the fires. The situation now calls for immediate action on the part of the bicycle business to inform and educate New Yorkers and the public at large about the safe riding, storage and charging of e-bikes, as well as their testing and compliance to and with UL 2849. The NBDA has already taken action to inform and educate bike shops in NY City, and it is now time for PeopleForBikes to step up and launch a comprehensive, city-wide e-bike and lithium-ion battery safety campaign.    

3/13/23 Gen Z spending gets supercharged by inflation and wage growth. Bloomberg The Close Americas Edition. Most people enter adulthood feeling broke and spending frugally. Not Gen Z. Spending by the youngest group of U.S. adults has been turbocharged by two once-in-a-generation drivers over the past year: decades-high inflation, and a tight job market that propelled strong wage growth. A boost in savings at the height of the pandemic also helped. Gen Z kept spending when other generations pulled back. Whether it’s out of necessity in the face of soaring prices, or because they can afford to splurge on travel and leisure, young adults today tend to be big spenders, credit-card data and surveys show. HPS Analysis: Gen Z is the generation born between 1997 and 2012. They are currently between six and 24 years old (nearly 68 million in the U.S.). HPS is wondering why the bicycle/e-bike business isn’t attracting and holding on to more Gen Z consumers. The NBDA Consumer Research, published in 2022, showed that Gen Z was among the first-time cyclists who purchased during the pandemic, but seem to be AWOL starting the last half of 2022, and going into 2023. Also, a high percentage of Gen Z bike/e-bike purchasers were women. This is among the challenges the bicycle business needs to step up, embrace and take advantage of going forward.

3/13/23 Why Fox News wants you to be afraid of electric bikes. electrek: MicahToll. Fox News is no stranger to the tactic of fearmongering as a way to stir up its viewers. But the media network’s latest misdirection campaign attempts to use fear to attack a surprising new target: electric bicycles. With a misleading story running last week entitled, “How e-bikes are exploding and killing people,” the media giant leaves little room for doubt about just how far it will go with misdirection to try to scare people away from the fastest-growing form of low-cost, efficient, and effective transportation. HPS Analysis: While it is true that micromobility devices, including e-bikes, have been identified as the source of a rash of lithium-ion battery fires fatalities in New York City, the problem is largely attributable to low-cost micromobility devices originating in China, and imported into New York City by a relatively small number of small retailers, as well as consumer-direct (DTC) sellers under the de minimis rule that bypasses U.S. Customs inspection, duty and taxes if a product’s F.O.B value is $800 or below. New York City now has a new ordinance requiring e-bikes to be tested and certified to UL 2849, and lithium-ion batteries to UL 2271. The ordinances become effective on or about September 20, 2023, giving retailers six months to sell off non-compliant products, and stock up on complying products.

 3/13/23 Vosper: Scorched earth: the strategic basis for continuous oversupply. Bicycle Retailer and Industry News. As HPS has noted, the strategic basis for continuous oversupply was not on the agenda for discussion at the Bicycle Leadership Conference (BLC) this year. As Rock Vosper pointed out, “We have too much bicycle inventory. Not just right now (when we have way too much inventory), but in general. That’s because, year-after-year, we keep ordering too many bikes and then having to put them all on clearance. And this insanity has been business as usual for our quirky little industry ever since the end of the Great Recession in 2009.” HPS Analysis: Vosper does his usual excellent job of bringing out the historical facts of the marketing strategies of major bicycle brands doing business in the U.S. market. He correctly refers to the “scorched earth” strategies of the top brands as “insanity,” but these strategies have purposeful thought behind them. Even more troubling is that a significant number of bike shop owners buy into it every year. However, HPS believes 2023 may be different because, (1) the pandemic-enhanced consumer demand that drove the bull-whip effect, and badly disrupted just-in-time inventory management, and led brands and retailers to pay more than they ever have in the history of our business for finished goods inventory that, (2) backed up in warehouses in unprecedented quantities as consumer demand ebbed away, and (3) the SVB collapse and a banking crisis changed the cost and availability of loans to refinance the excess inventory. This is a combination we have never experienced before, and it may make “scorched earth” look mild.

3/14/23 Revel Bikes manufactures 3D-printed carbon fiber protype bike. Bicycle Retailer and Industry News. Revel Bikes revealed what it’s calling the world’s first 3D-printed carbon fiber downhill mountain bike. The Rodeo is a concept bike for now, but the brand said it is a ready-to-ride fully-functional bike designed and manufactured in the U.S. HPS Analysis: We have been long time advocates of 3D printing and “additive manufacturing” as a methodology that can be employed to bring domestic manufacturing of bicycles and e-bikes back to the U.S. 3D isn’t a silver-bullet, but it is a viable technology that Revel Bikes is providing as a “proof of concept” model for others interested in reshoring to investigate. At the beginning of the pandemic in 2020, a contact who is in the prototype business suggested HPS investigate “pop-up” manufacturing that involves lots of 3D printers and digital files, instead of hard tooling, and a large capital investment. As the financial risks associated with sourcing in unfriendly geo-political regions increases, additive manufacturing in friendly geo-political regions becomes more attractive.

3/15/23 Supplier, Buyer relations are shifting again as pandemic strains ease. The Wall Street Journal. Big retailers are looking to reassert leverage in supply chains to rein in costs. The commercial relationships between retailers and their suppliers that shifted under the strains of the COVID-19 pandemic are transforming again as companies cope with continuing changes in consumer spending and high costs across their supply chains. “We’re starting to see the power shift a little bit back to buyers again,” said Rob Handfield, a supply-chain management professor at North Carolina State University. Many retailers placed big orders early last year, and rushed goods around transportation bottlenecks, to ensure they had enough merchandise on hand for the fall, when consumer spending typically increases heading into the winter holidays. The result was that many retailers ended up with excess inventories and too many of the wrong items in the wrong places as Americans shifted spending to services rather than goods. HPS Analysis: Mass merchant, sporting goods retailers, specialty outdoor and specialty retail brands, have all cancelled orders and reduced forecasts with their supply chains in Asia. These order cancellations and reductions have left many OEMs in China and Taiwan with excess component inventory, and reduced their work forces. At the same time, the retailers and brands want cost reductions as they re-asset their buying power. None of this is helping working relationships in the supply chain, and the large inventory overhang from components at OEMs in Asia, to finished goods in brand warehouses and bike shops in the U.S. The American bicycle business needs to focus on short-term and long-term solutions.

3/15/23 The unexpected American shopping spree seems to have cooled. NPR Economy. Retail spending declined 0.4 percent in February compared to January, the Commerce Department said. That’s after a surprise start-of-the year shopping spree that contradicted the Federal Reserve’s goal of cooling down the economy to fight high prices. People spent about two percent less on cars and parts, and 2.2 percent less at restaurants and bars, the latest reports on retail sales showed. People bought less furniture, fewer clothes, as well as home-improvements and gardening supplies. Spending at department stores dipped four percent. We don’t know the percentage, but people also spent less on bicycles and e-bikes. Inflation has been moderating since peaking last summer, but consumer prices in February were still six percent higher than a year ago. People have been shifting more of their budgets toward activities and outings, where prices continue to rise. In February, people spent 0.6 percent more at grocery stores, and 1.6 percent more on online shopping. And overall, retail spending remained 5.4 percent higher than it was a year before. HPS Analysis: It is clear that American consumers remained “resilient” throughout 2022, were still able to spend at a healthy clip, and through February 2023 have continued to spend, but not on bicycles or e-bikes. It seem obvious that the bicycle business needs to invest in good-quality and ongoing consumer research to determine why American consumers are not spending on bicycles and e-bikes, and determine what the industry has to do to attract consumers of all ages, ethnicities and income levels to bicycle/e-bike riding participation and purchases.

3/16/23 Import prices fall again, and are now helping to reduce U.S. inflation. MarketWatch Economic Report. The cost of imported goods fell 0.1 percent in February, and declined for the seventh time in the past eight months, helping to contribute to a slowdown in U.S. inflation. Over the past year, the cost of imports has fallen 1.1 percent, helped by a big reversal in the price of oil since last summer. That’s the first time import prices have shown a year-over-year decline since the end of 2020. As recently as a year ago, import prices were rising at a 13 percent pace. HPS Analysis: We have been vocal about the excess finished goods inventory stuck in the U.S. bike shop channel of trade. While imports of regular bicycles were down over 33 percent, and imports of e-bikes increased approximately 25 percent in 2022 over 2021, that inventory entered the supply chain when import prices were rising at a 13 percent rate, and much of it is sitting in warehouses at the highest landed-cost ever paid. That same inventory is being devalued daily by discounting and sale prices, some of which is generated by brand DTC sales tactics. Replacement inventory brought through the channel of trade today is at, or should be at, a significantly lower price.

3/17/23 U.S. tariffs on metals, some China goods, raised American prices. Bloomberg Economics. U.S. importers bore almost the entire burden of tariffs that President Trump placed on more than $300 billion in Chinese goods, raising the cost of goods bought by American companies, a report by an independent U.S. government agency found. The U.S. International Trade Commission, a bipartisan entity that analyzes trade issues, found an almost one-to-one increase in the price of U.S. imports following the so-called section 301 tariffs, it said in a report on Wednesday, March 15. The conclusions back the longtime assertion of U.S. Chamber of Commerce and independent academic economists that the cost of the tariffs hurt American firms more than those in China. HPS Analysis: Bicycles and e-bikes are the poster children of the section 301 tariffs. While actual 25 percent punitive tariffs have been suspended, they are still on the books, and the Biden Administration wants them as a bargaining chip in negotiations with the Chinese over future trade. The bicycle business has explained from the beginning that importers, retailers and consumers are paying the punitive tariffs as part of increased retail prices. During the pandemic, American consumer demand for bicycles and e-bikes drove the market, followed unfortunately by the bullwhip effect in supply, but channels of distribution found little or no price resistance until the demand ebbed, and consumer purchases of two-wheeled micromobility products cooled. At this point, the 25 percent punitive section 301 tariffs are baked into price structures. While they have undoubtedly contributed to inflation, they won’t be a factor in pricing calculations (read that as price reductions) until they are eliminated entirely.

3/17/23 Consumer sentiment falls for first time in four months – and that was before Americans knew about SVB. MarketWatch. A survey of consumer confidence fell for the first time in four months, reflecting angst among Americans about high inflation, and the health of the economy. The University of Michigan said most of the survey was completed before the collapse of Silicon Valley Bank. Consumer sentiment surveys help gauge how Americans feel about their own finances, as well as the broader economy. Americans worry about inflation, and a banking crisis may add to their anxiety. Sentiment fell the most among lower-income and younger Americans who tend to suffer disproportionately from high inflation. Some wealthier people with large stock holdings were also less confident in light of a recent decline in equities. HPS Analysis: Despite inflationary price increases, and eroding confidence in the economy, American consumers have continued to spend on staples and necessities, while shifting from goods to services, like eating out or ordering in. A fall in consumer sentiment doesn’t bode well for consumer spending going forward into the spring selling season. The bicycle/e-bike business has not kept pace with consumer spending since Q3 2022, and is approaching three quarters of slowing store traffic and ebbing sales, with consumer sentiment now falling as well. The bicycle business and its associations need to get serious about customer retention, close rates, and the outreach message.

3/20/23 Acer (yes, the computer company) is building a fancy electric bike with built-in AI. Electrek Micah Toll. The Acer ebli is a lightweight (35 pound) e-bike with 20-inch wheels, mono-fork, and features built-in AI designed to predictively control the transmission, and make use of collision detection sensors for a safer ride. There are also proximity unlocking features that automatically lock the bike when the rider leaves, and unlocks it when the rider returns. There also is a built-in GPS locator. The ebli has a belt drive, 160mm hydraulic disc brakes, airless tires, and 360-degree LED lighting. There is no throttle, and the 460 Wh electric battery has a range of 66 miles. The bike has a top speed of 15 mph with a 250W rear hub. The ebli removable battery serves as a portable power station to charge mobile devices like cell phones and computers. No price has yet been announced. HPS Analysis: To our knowledge, Acer is the first electronics company to jump into the micromobility arena. The fact that it is Taiwan-based and a recognized brand gives it, we believe, a major advantage over Chinese manufactured e-bikes, both from a logistics standpoint, and a geopolitical perspective. The fact that so much AI is packed into this design also gives it a hi-tech added value leg up over its rather large field of competitors. Like everyone else, we need to see the price, distribution and availability, but this latest entry in the e-bike market is most interesting.

3/21/23 CEO Ken Lousberg on SRAM’s global production strategy. Bike Europe. The announcement in February to build a new factory in Taiwan confirmed SRAM’s commitment to its largest production base. With the investment, SRAM is expanding its capabilities and capacity in Taichung. A week before the opening of the Taipei Cycle Show, SRAM CEO Ken Lousberg elaborated on the choice for Taiwan, and his market outlook for the months ahead. Asked if he expects the market to be on the positive side again in the second half of the year, Lousberg responded, “I think it will be stable by the second half of the year, but it will depend on the price point and channel position as to when things really start growing again. I’m sure every company will experience some kind of correction, as their part of the channel has to clear out first, and then we should see a positive turn. As a component manufacturer, we are always at the tail of the bullwhip, and it hits us last. For us, sales volumes will certainly go down from the highs we experienced in the last few years, but settle above per-pandemic levels likely before returning to a regular four to five percent annual growth.” HPS Analysis. We recommend you read this whole article. We don’t know Ken Lousberg, but found his comments to be very insightful. SRAM is clearly doing “something” relative to acquiring the German company Amprio, but is still reluctant to share details, but Lousberg did state, “The e-bike market is very important to us.” Imports of regular bicycles were down just over 33 percent in 2022, while imports of e-bikes are estimated to have grown by 25 percent in 2022. SRAM needs to improve its position to take advantage of the growing e-bike segment world-wide.

3/21/23 Will Taipei Cycle 2023 contribute to solving the industry challenges? Bike Europe. Taiwan’s bicycle industry was eager to show itself to the outside world again at the Taipei International Cycle Show March 22-25. After an absence of three years, one of the leading industry events opened its doors again. The industry is facing some interesting challenges which have become pressing over the past few years. Bike Europe feels it is time to discuss them face-to-face. The biggest topic for the international industry lays in the challenges to steady the huge fluctuations between production and demand. For two years, the industry faced a massive demand for products which it could not fulfill by any means. While manufacturing went at full capacity to meet demand, this situation flipped in 2022 to oversupply, causing high inventory on markets around the world. HPS Analysis: We don’t quibble with what Bike Europe expresses as “the industry challenges,” but we don’t think the Taipei International Cycle Show is going to be the place to resolve the challenges facing the industry. The reality of the situation is that good decisions demand good data (Pew Research Center). The bicycle/e-bike business in Europe has much better data than we have in America. As just one example, while Ed Benjamin does a superb job of pulling together U.S. e-bike import data from the fractured HTS system run by U.S. Customs, he will be the first to tell you the bicycle/e-bike business has to lobby hard to improve this vital data collection source so there is clear and concise monthly data on U.S. imports and exports of e-bikes that matches that collected and reported on regular bicycles. Also, the “Scorched earth: the strategic basis for continuous oversupply” issues that Rick Vosper writes about, will sadly not get resolved, by the Taipei International Cycle Show.

3/21/23 Electric bike tax credit bill reintroduced, providing up to $1,500 off new e-bikes in US. electrek Micha Toll. The Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act has just been reintroduced to the U.S. House of Representatives. An e-bike tax credit has long been seen as a way to help get these effective small-format EVs into the hands of more Americans. To qualify, the e-bike would have to be priced at less than $8,000, and the tax credit would be allowed once per individual every three years, or twice for a joint-return couple buying two electric bicycles. The incentive, according to the author, is designed to make electric bicycles more accessible to lower income Americans. HPS Analysis: This is most welcome, and it will gain life expectancy if it can pick up bi-partisan support in the House and the Senate. Frankly, in the face of the bad public relations being generated because of the micromobility-related fires and fatalities, primarily in New York City, this bill give advocates something big and beneficial to talk about. This bill deserves loud and continuous support from all corners of the bicycle business.

3/21/23 Study: Gen Z consumers least likely to reduce spending amid inflation. Chain Store Age CSA. Gen Z, adults ages 18 to 26, are the least likely to report that inflation has impacted their spending, and they are most reluctant to reduce spending compared to other generations, according to a report by Jungle Scout, an all-in-one platform for e-commerce sellers. The report found that even amid inflation, Gen Z consumers are also setting a new standard for e-commerce, with 32 percent of shopping online at least once daily. This compares to 25 percent of Millennials, 15 percent of Gen X, and seven percent of Baby Boomers. HPS Analysis: Gen Z has shown up several times this month as being  big spenders in this inflationary economy. Some of us remember the BMX Boom that kept the bicycle business going between the 1971-1974 Bike Boom, and the Mountain Bike Boom of the 1980’s. Yes, Gen Z is young, but they just keep spending, very actively on-line. Staff for Gen Z, merchandise for Gen Z, use social media to reach out and market to Gen Z, and use your commerce-enabled website to sell to them 24-7.

3/22/23 The Fed raises interest rates again despite the stress hitting the banking system. NPR Economy. The Federal Reserve raised interest rates for the ninth time in a row on March 22, opting to continue its campaign against high inflation, despite stress in the banking industry following the collapse of two regional banks. Fed policymakers voted unanimously to raise their benchmark interest rate by a quarter percentage point to just under 5 percent, which will make it more expensive for people seeking car loans, or carrying a balance on their credit cards. The Fed will need to weigh the impact of the collapse of the two regional lenders in deciding how much to raise interest rates going forward. Since the collapse of Silicon Valley Bank and Signature Bank, other banks are expected to be more conservative about making loans. “Recent developments are likely to result in tighter credit conditions for households and businesses, and to weigh on economic activity, hiring, and inflation,” the Fed statement said. “The extent of these effects is uncertain.” Tighter credit conditions, like rising interest rates, lead to slower economic growth. HPS Analysis: “Credit is the grease that makes small businesses’ wheels run, and makes the overall economy run,” said Kathy Bostjancic, chief economist at Nationwide. “If that credit starts to get choked off,” she said, “you’re going to have a pretty big – I would expect – pullback.” The Fed wants to curb inflation, but rising interest rates also raise the risk of tipping the economy into recession. Fed policymakers aren’t projecting a recession. Members of the rate-setting committee expect the economy to grow 0.4 percent this year, and they expect the unemployment rate to climb to 4.5 percent, from 3.6 percent in February. The bicycle business and bike shops are now between a rock and a hard place. Get inventory and payables under control, to the extent possible, and make sure you communicate with suppliers about accounts payable. Be honest about what you can do, and hammer out a payment plan and stick to it. Reach out to your banker and make sure you communicate, and again, hammer out a financing plan, and stick to it.

3/23/23 Five ways the fallout from the banking turmoil might affect you. NPR Economy. The fallout from recent bank collapses and emerging rescues can seem both alarming and distant. Is your bank account safe? If it’s under $250,000, your money is fully insured by federal authorities under all circumstances. You might ask why you should care about what happens to banks if your money is safe. All the consequences are still playing out for the U.S. economy, small businesses like bike shops, and regular people. Here are five things to be aware of. (1) Will the banking turmoil trigger a recession? This depends on many factors, but banks may become more cautious about lending, resulting in less access to money for businesses and individuals. (2) Will getting a loan become even more expensive? The Fed answered this question March 22 when it raised interest rates. These rates guide how much people and businesses pay for various loans, and they’ve been rising for over a year. (3) Will the federal rescue trickle down to higher fees for regular bank customers? This depends on a number of things, including how successful the FDIC is in selling the failed banks’ assets, and the steadiness of the banking system. Similar failures mean more insurance payouts that could result in FDIC assessing higher fees on banks, who could then pass on the new costs to all their customers. (4) Could this make big banks even more powerful? This is a possibility if there is an exodus by depositors from smaller, regional banks, to bigger ones because of the perception of less risk forcing smaller banks to close or get absorbed into bigger institutions, leaving fewer lenders with more clout. (5) Does this mean a new era of less Silicon Valley innovation? Before its collapse, Silicon Valley Bank (SVB) did business with nearly half of U.S. tech startups, including those doing biomedical research. The SVB and Signature Bank failures may lead to a slowdown in lending to smaller, untested business ventures, or a slowdown in Silicon Valley startup spending overall. HPS Analysis: This banking turmoil boils down to tighter loan policies, higher interest rates, and higher fees going forward. The Fed is not, and does not want to be, the small business person’s friend until recession is under control.

3/23/23 Dialing back rebound projections. The Wall Street Journal Logistics Report. The much-anticipated rebound in demand in the second half of the year may be a bit farther off. Freight and logistics operators are starting to dial back their expectations for a recovery in time for the traditional fall peak shipping season, as retailers signal more caution in an uncertain consumer economy, and volumes moving through supply chains tail off more than anticipated. Nike, Target and Kohl’s remain guarded in ordering from suppliers, as they continue to dig out from a glut of inventory. Logistics executives have projected a recovery, as supply-chain disruptions have eased, and companies return to more traditional inventory replenishment cycles. Several say they remain optimistic, but note that the broader economy looks increasingly uncertain. HPS Analysis: As U.S. container imports from Asia hit a three-year low in February, the American bicycle business continues the shakeout as it struggles with an unprecedented inventory overhang and imbalance, as all channels of trade struggle to increase sales through March. It appears that the year will be determined in large part by how brisk consumer demand, store traffic, and retail sales are during the second quarter of the year.

3/26/23 Bicycle industry and advocates unified behind electric bicycle rider safety. Bicycle Retailer and Industry News. This press release headline was published as the League of American Bicyclists (LAB) kicked off its National Bike Summit in Washington D.C. March 27-29. PeopleForBikes and the LAB will launch a new electric bicycle rider-specific safety education program this summer. According to the press release, this first-of-its-kind campaign will help new and experienced riders understand best practices specific to riding an e-bike. HPS Analysis: This e-bike rider safety education program is, in our opinion, overdue. We urge PFB and LAB to reach out to the NBDA to join this initiative so that bike shops across the country will become centers for e-bike education and information.

3/29/23 How big a problem is greedflation? CNN Business. Inflation is ravaging shoppers’ wallets, and the Federal Reserve has responded by instituting a regimen of painful interest rate hikes that could land the economy in a recession. But corporate profits are surging. U.S. profit margins have reached record levels not seen since the immediate aftermath of World War II. How did that happen? Some economists are pointing to “greedflation,” the idea that companies are using high inflation rates as an excuse to price-gouge their customers while they bring in record profit margins. Between the end of 2020 and the third quarter of 2022, employee pay rose by 14 percent, but corporate profits grew by a whopping 28 percent. Instead of calling this out as the primary cause of high inflation, central banks have instead chosen to focus on rising nominal wages as threatening to embed higher inflation, the so-called “wage/price spiral,” referring to the Fed’s theory that wage growth has to slow down for prices to ease. Isabella Weber, an economist at the University of Massachusetts Amherst, outlined in a recent academic study what she calls a “price-price spiral,” where companies hike prices beyond an increase in their costs. Lael Brainard, former Fed vice chair and current director of the National Economic Council of the United States, has expressed worry that a price-price spiral could ultimately tank the economy by turning consumers off from spending. HPS Analysis: The first quarter of 2023 has come to an end, and corporations will begin to report their earnings. There are not a lot of public companies in the bicycle business, but the reports from those that are will provide key insights into the profit margins, and to some extent inventory. If MSRPs keep going down, it may be a sign that margins are being reduced as raw material and shipping costs fall-away, allowing slimmer profitability while lowering prices to move inventory. Economists tell us price-price spirals can’t last forever, particularly in recessions.

3/30/23 Why the China-US contest is entering a new and more dangerous phase. The Economist. You may have hoped that when China reopened, and face-to-face contact resumed between politicians, diplomats and businesspeople, Sino-American tensions would ease in a hurry at dinners, summits and small talk. But the atmosphere in Beijing reveals that the world’s most important relationship has become more embittered and hostile than ever. In the halls of government, Communist Party officials denounce what they see as America’s bullying. They say it is intent on beating China to death. Western diplomats describe an atmosphere laced with intimidation and paranoia. In the Diaoyutai State Guesthouse, multinational executives attending the China Development Forum worried what a deeper decoupling would mean for their businesses. The only thing both sides agree on is that the best case is decades of estrangement, and that the worst, a war, is growing ever more likely. HPS Analysis: The wishful thinking that China reopening would eventually see the working relationship between bicycle business buyers and the sellers in China return to pre-pandemic norms is just that — wishful thinking. What has happened since 2020 is a hardening of the Chinese Communist Party’s world view, including wealth redistribution among the people instead of to a wealthy class of mega rich. This does not bode well for Taiwanese-owned and controlled bicycle businesses manufacturing in the PRC, or their customers outside of China. It also places at risk the multinational bicycle brand businesses inside China. As we have said, decoupling will be very difficult, but risk assessments are pointing toward finding alternate sourcing outside of China sooner than later, as difficult as this may be.

Contact Jay Townley:


Electric bicycles have fundamentally changed the bicycle business in America. Europe has a mature e-bike business and country markets, compared to the embryonic business and market in the U.S.

Everything continues to change rapidly in America as the market matures, including e-bike design and micromobility electric propulsion systems, consumer preferences, regulations and standards, options for safe storage and use of micromobility lithium-ion batteries, techniques for sales staff and service technicians, as well as consumer education and awareness.

And fire departments are changing the way they fight micromobility lithium-ion battery fires, and their hazmat protocols for clean-up and disposal.

New York City has a unique critical mass of delivery gig workers on e-bikes and other micromobility devices powered by lithium-ion batteries. In 2022, the Fire Department of New York City (FDNY) reported 191 fires attributed to micromobility devices, including e-bikes, resulting in 140 injuries and, sadly, six deaths.

In the first two months of this year, lithium-ion batteries for micromobility devices, including e-bikes, were believed to be responsible for 22 fires, leading to 36 injuries and two deaths.

On February 27, Bicycle Retailer and Industry News (BRAIN) published an article about 25 FDNY fire protection inspectors, fire marshals and sheriff’s deputies inspecting bike shops, and finding “hundreds of battery charging, storage violations at shops.”

This was followed on March 1 by publication in BRAIN of an interview with Consumer Product Safety Commission Chair Alex Hoehn-Saric with the headline: CPSC: The industry’s 3-class e-bike framework is not part of our statutes.” HPS has offered the same opinion for months, but the industry has paid little attention until this interview.

The BRAIN article goes on to state: “When asked about regulating Class 3 e-bikes and e-MTBs, and “out-of-category” e-bikes, Hoehn-Saric said in a February e-mail exchange with BRAIN that, “I know there have been questions and confusion around jurisdiction of these products, so I want to take this opportunity to provide some clarity about where CPSC stands. First of all, the Class 1, Class 2, Class 3 framework is not part of CPSC’s statutes, so any assertion about our jurisdiction over an entire category is not accurate.Decisions about agency jurisdiction over e-bikes are made on a case-by-case analysis of the products.”

On March 2 BRAIN announced: “NY City Council passes lithium-ion battery safety package.” The subhead states that: “E-bikes now need to meet UL 2849 or similar certification: batteries UL 2271.”

The city lithium-ion battery regulation is part of a package of five bills, and goes into effect six months after being signed into law by the mayor. Included is a requirement to develop a public education campaign on fire risks of e-bikes and e-scooters, and specific educational materials for delivery workers to be distributed by third-party delivery apps.

March 4 BRAIN published an article titled: “What New York’s e-bike law will mean to retailers,” quoting an interview and letter sent by Heather Mason, president of the NBDA, to members about the NY city lithium-ion battery safety package.

This is an insightful article that, among many other things, quotes Chris Nolte, a NY City bike shop owner, who has sold UL certified e-bikes exclusively for the last two years as stating: “… the new regulations will have a huge impact on the sellers of thousands of low-cost e-bikes used by food delivery workers in the city.”

Charlie McCorkell, owner of three Bicycle Habitat bike shops in NY City, is quoted as saying (among other things), “…to improve fire safety in the city, the federal government will need to enforce safety regulations at the import level.”

What is generally agreed on is that New York City is a trend setter, and the FDNY and City Council will be followed by other fire departments and municipalities, closely watched by the federal government, while changing the game.

Contact Jay Townley:


It’s Wednesday, January 11, and I am walking down an aisle of the CABDA West Expo with my long-time friend, and editor of this newsletter, Fred Clements. It’s the second day of the West Expo, and attendance is actually good for the second day. I ask Fred, “…what do you think of this first trade show of 2023?”

Fred’s response, “It is a sign of life!” I ask what he means. He responds, “It is a sign of life for bike shops after the pandemic.”

As I am getting ready to travel to CABDA East at the Meadowlands, just outside of New York City, I thought about this, and reflected on what I considered to be a well-attended CABDA Midwest Expo in February. I found myself agreeing that the CABDA trade shows, held during the first quarter of this year, are a strong sign of life for the bike shop channel of trade in the U.S.

They are a clear statement that independent bike shops are open for business, and whatever 2023 has in store, bike shops will be there to sell the latest in bicycles, e-bikes, parts, accessories, kit, and to provide professional service.

I believe the big bike brands and major industry trade association are short-sighted in not exhibiting or otherwise supporting the CABDA Expos.

The Bike Shop Count chart shows that approximately 27 percent of the estimated total number of American bike shops are totally independent, or “pure” independent, and that approximately 67 percent are “authorized” dealers of one or more of the big bike brands. Many make the decision to attend a CABDA Expo in their region of the country, as they feel it is in the best interests of their business to do so.

You might well ask if I am going out of my way to promote the CABDA Expos? The answer is a whole-hearted yes. We as an industry need to socialize and share ideas, and more importantly interact as a community of common interest.

I know one of the primary purposes of a trade show is for retailers to buy from suppliers, but in these times of uncertainty and turmoil, there is also the need to seek knowledge and ideas to survive and grow.

The National Bicycle Dealers Association (NBDA) is collaborating with the CABDA Expos in providing educational content, and will continue to produce and present webinars and educational programs through the rest of the year for bike shops.

Joe Marcoux, in my opinion one of the best sales trainers and educators specializing in the bike shop channel of trade, does multiple presentations at the CABDA Expos. I encourage bike shops to each out to Joe as a resource for their employee training needs.

Joe often refers to Peter Drucker, who warned that the greatest danger in times of turbulence is not the turbulence. It is to act with yesterday’s logic.

This is another sign of life from the CABDA Expos, providing the information attendees are sharing about what’s new in consumer wants and needs, and how to provide the products and services to satisfy them.

Contact Jay Townley,


This is the slogan of the Pew Research Center that refers to itself as a nonpartisan fact tank: Good Decisions Demand Good Data.

In our corner of the world, the National Bicycle Dealers Association (NBDA) provides two examples of good data — one covering adult cycling consumer habits, and another about bicycle shop financial metrics.

The consumer research is an invaluable planning reference guide for suppliers, brands, associates, and bicycle retailers as they shape their strategic and business planning around understanding consumer bicycle and e-bike buying habits over the last two years.

The report contains detailed data, analysis, charts, and actionable information about the demographics of the American consumers that purchased which brands from what retail sources, at what retail prices, and with what accessories during the last two years.

With the report, readers will be able to study the clusters of adult purchasers, including the 33.4 percent of women who started cycling, and the 22 percent who returned in the last two years, including what style they purchased, from what retailer, for what kind of cycling. It also reveals what it is going to take to retain them, and what they plan to spend on cycling going forward.

Key study highlights:

  • What are the key cyclist segments in today’s market?
  • How do these segments buy? How do they interact with IBDs?
  • How have buying channels changed? What channels are the most important for each segment?
  • How have bicycle buying habits changed?
  • Will the changes be long term?
  • How can we take advantage of the changes?
  • Is the new cyclist segment significant? How big is it? What is the long-term potential?
  • What are the most important buying factors in each segment?
  • How does my brand perform in each segment?
  • What messages resonate with each segment? How do I reach them?

Associate members of the NBDA may purchase the report for $3,000. Retail and mobile members of the NBDA may purchase a special retailer version of the report for $199. Retailers who are not members of the NBDA can purchase the special retailer version of the report for $399.

The second research study is the latest version of the NBDA’s Cost of Doing Business study. Specialty bicycle retailers were surveyed in early 2022, with most answering based on the full 2021 calendar year.

This unique research effort represents the most up-to-date comparative financial performance information available anywhere. This study is designed to serve as an easy-to-understand tool for specialty bicycle retailers to evaluate their own company’s operating results, in order to pinpoint strengths and weaknesses, and improvement opportunities.

In early 2022, the National Bicycle Dealers Association mailed a strictly confidential survey questionnaire to all NBDA member firms, as well as a random sample of non-member firms.

The survey collected detailed financial and operating information from industry operators by sales revenue size, store type, geographic region, and number of locations.

The NBDA Cost of Doing Business Survey was compiled, tabulated, and prepared by Industry Insights, Inc., a professional research and consulting firm which specializes in industry operating surveys, compensation studies, educational programs, and customized research services. Completed surveys were returned in confidence through early 2022, to Industry Insights, Inc. All company identification was removed from each questionnaire, and only a confidential identification code remained. The data was then coded, keyed, and edited by Industry Insights’ financial analysts for validity. Computer processing was performed on all data to insure statistical validity, and to produce the financial and operating ratios contained in this study.

Using this information, bicycle retailers can compare their own figures with other firms in their revenue category, with other single or multi-store operators, with stores of similar size, with stores of a particular geographic region, and with the high-profit firms (i.e., those in the upper 25% based on before-tax return on assets). Spotting significant differences between your own store’s performance and the industry composites can be the first step toward improving performance. However, deviations from industry norms do not automatically call for some action.

To use this report, determine which of the above data groups pertain to your operation so that you can compare your own store’s results to retailers that are comparable to your own. Be concerned only with those sections of the report that are relevant to your business.

Price: $399. NBDA member price: $349. All reports delivered as a PDF file only.

For information on both reports, visit


54 years ago, the American bicycle industry faced the specter of the federal government regulating bicycles as products sold to consumers. The reaction of the industry, through its trade association the Bicycle Manufacturers Association (BMA), was to resist and fight the government by advancing the manufacturing standard it had developed in the face of growing imports.

Schwinn, the company I worked for, had left the BMA in the late 1960s in a dispute over promoting chain store bikes. Sears was the largest retailer of bicycles at the time, and held sway over Murray-Ohio and Huffy, the domestic sources of its bicycles, making it the largest financial contributor to the industry association.

Our marketing department continued to cooperate with the industry association, and coordinated our full-time bicycling advocate activities and financial support for the League of American Wheelmen and Bicycle Institute of America (BIA), the umbrella bicycle industry association under which the BMA operated.

When it became obvious that Congress was going to pass, and the President was going to sign, the Consumer Product Safety Act creating the Consumer Product Safety Commission (CPSC), and that the CPSC was going to develop a mandatory bicycle safety regulation as its very first standard-setting activity, the BMA collected funding to work in opposition, and to lobby both the Congress and the new federal agency.  

The BMA approached Schwinn for its help. Frank V. Schwinn, the third generation president of the company, discussed the request with his management team. He made the decision that his company was going to cooperate with CPSC and BMA to craft the best possible bicycle safety regulation for the whole of the American industry, including domestic producers and importers, and for the consumers who purchased bicycle products for themselves and their children.

Some of Mr. Schwinn’s management team felt the accident cases documented by CPSC and its predecessor agency, the Bureau of Product Safety, “wasn’t our problem” because Schwinn’s manufacturing and quality standards were far better than those of the rest of the bicycle manufacturers and brands.

Mr. Schwinn responded that it was indeed our problem, because the public judged all of us, all of the bicycle manufactures and brands, as the same when it comes to their safety, and the safety of their children.

I was one of the young managers who had been working with the Bureau of Product Safety, and was engaged on behalf of Schwinn with the newly formed CPSC. I reported to Ray Burch, vice president of marketing. He made sure I understood Mr. Schwinn’s meaning and intent. I acted accordingly, including cooperating with BMA when our aims and objectives were mutually compatible, and to opposing BMA when they were not. When in doubt, Ray advised, “do the right thing, and Mr. Schwinn will understand.”

As representatives of the Schwinn Bicycle Company and the Schwinn family, we didn’t impose or recommend Schwinn standards. We used those standards as examples of what could be done, how to do it, and how to measure it. In some cases, we learned from what CPSC developed, and from what BMA members and importers were doing.

The point is that we worked for at least half a decade on achieving the best possible federal mandatory bicycle safety standard that in turn provided safe bicycles to American consumers.

When the mandatory bicycle safety regulations became effective January 1, 1975, there was a two-year requirement for a label stating: “Meets U.S. Consumer Product Safety Commission Safety Regulations for Bicycles.” In Schwinn’s case, this was a yellow hang-tag that went on the handlebar with the owner’s manual. It served to inform and educate American consumers.

I realize this is history, and that many in today’s bicycle business are not interested in the history of either the business, or what is now an old and tired CPSC bicycle safety standard. I still feel there is a lesson to be learned about not denying responsibility by saying “it’s not our problem,” just as Frank V. Schwinn said 53 years ago.

There are those among the multi-national bicycle brands with headquarters in the U.S. that advocate for making international bicycle safety standards, and specifically ISO4210-10, the U.S. mandatory standard replacing the CPSC standard.

I for one think this is an excellent idea! ISO4210 was developed as the CPSC was developing the first mandatory bicycle safety standard, with the same participation through the American National Standards Institute (ANSI), CPSC, BMA and Schwinn.

Don McKay, an engineer who was with the Bureau of Product Safety and transferred to CPSC, was contacted by the International Organization for Standardization (ISO) and ANSI about the formation of a standards committee under ISO to create an international bicycle safety standard that would be as compatible as possible with the mandatory U.S. standard being developed by CPSC. The purpose was to ensure foreign-manufactured bicycles would be able to enter the U.S. market by meeting the mandatory federal standard.

When Don McKay asked Schwinn to participate, Frank V. Schwinn approved because he saw it as part of “our problem.” His company had been importing components from Europe and Asia since the end of World War II, and became a significant importer of complete bicycles during the 1971-1974 “bicycle boom.”

ISO4210 has its origin in the original CPSC bicycle safety standard. The significant difference now is that the CPSC standard has aged, basically frozen in time, while the ISO4210 international standard has been updated frequently as the products have evolved over the years.

Again, this is history that many in the industry today have no interest in. However, there should be an immediate interest in the public perception of an industry that is concerned about the safety of the consumers that purchase and use their products.

The consumer doesn’t know, or care, if the lithium-ion battery that powers the e-bike they own is from a “member” of a trade association or not. What they care about and expect is that the product they purchased, whether from an online seller or a bike shop, is safe to own and use.

They are also naïve, demanding and wanting both the lowest price and safe products. It is our problem, as an industry, to provide this in the best way possible for them. It is also an opportunity just waiting to be discovered.

As many of you already know, Human Powered Solutions (HPS) supports the National Bicycle Dealers Association (NBDA) in advocating for UL2849, a voluntary third-party testing and certification e-bike electrical power systems standard.

UL 2849 was developed under the auspices of Underwriters Laboratory (UL) pre-COVID, with the active participation of three members of the bicycle industry: Trek, Bosch and SRAM. The committee that developed UL2849 is still active, and has already amended this voluntary standard once since it was promulgated January, 2020. I can let you know who sits on the UL2849 development committee on request.

Brands can have their e-bike electrical propulsion systems third-party tested, certified, and listed with UL, which gives them the right to use the UL sticker on their products.

HPS has reviewed the cost associated with testing, compliance and listing to UL2849, and shared our findings with Bicycle Retailer and Industry News. The costs of compliance and listing, like insurance and shipping, are amortized over the cost of each complete product, or stock-keeping-unit, utilizing that complete electric drive system.

For some brands this will spread the cost over an appreciable quantity of units. Depending on annual unit volume, the compliance cost can have a wide range that with most brands will not have an appreciable effect on retail pricing.

With this said, HPS feels this is the time for an e-bike brand to promote its products’ compliance and listing to UL2849 with retailers and consumers, and is an opportunity to enhance and build brand integrity and share of mind with all.

Contact Jay Townley:


All the news and factual bits and pieces that float to the surface indicate the American bicycle business is in an uncertain place, as our primary supply chain shuts down from January 20 until about February 6 for Chinese New Year, and we wait to see how many workers are able to come back to factories, desks, CAD stations, trucks, warehouses and ocean ports.

So much of the global and U.S. bicycle business is privately-held, or in the hands of private equity and venture capital, that very little public information is available about layoffs, order cancellations, inventory, and the financial condition of the supply chain.

With that said, here are a baker’s dozen headlines from U.S. and European news sources, bicycle trade and consumer publications that shed some light on the currents and winds of the bicycle business during the month of January 2023.

1. Peloton agrees to pay a $19 million fine for delay in disclosing treadmill defects. This story is taken from National Public Radio and, goes on to report:

“Peloton had received more than 150 reports of incidents involving people, pets or objects being pulled under and entrapped at the rear of the treadmill, by the time the company informed regulators, the CPSC said.

“Those reported incidents included the death of a child and 13 injuries, including broken bones, lacerations, abrasions and friction burns, the agency said.

“After initial resistance from the fitness company, Peloton and the CPSC jointly announced the recall of the Tread+ treadmill in May 2021.”

HPS thinks this is significant because it shows that the greatly-weakened CPSC, often portrayed as “toothless” by the bicycle industry, does indeed have fangs that bite, and when it gets the support of Congress, can and will enforce section 15(b) of the Consumer Product Safety Act.  

The bicycle industry association, in HPS’s opinion, should pay careful attention to CPSC going forward.

2. Both Merida and Ideal Bike announce top management changes. The story appeared in Bike Europe, and reports:

“Merida CEO Michael Tseng will step down as president of Merida. His son, Vansen Tseng, will assume this position following an approval by Merida’s board of directors effective 1 February.

“Ideal Bike general manager Tim Lin already stepped down on 31 December 2022, but will remain with the company as special assistant to the chairman. At the turn of the year the vice president of Ideal China, Frank Chen, was appointed as Lin’s successor at Ideal Bike.”

Merida is the number two bicycle and e-bike Original Equipment Manufacturer (OEM) in Taiwan, with manufacturing facilities in mainland China and Europe. The U.S. brand most associated with Merida is Specialized. Merida also owns a percentage of Specialized.

Ideal is the number three bicycle and e-bike OEM in Taiwan, with manufacturing facilities in mainland China, and is the source for a variety of U.S. and European brands.

Merida is a public company traded on the Taipei stock exchange, and we believe Ideal is as well. HPS finds the timing a bit odd given the uncertainty of 2023 and what we believe is the mounting financial pressure on all the top-tier Taiwanese bicycle industry OEMs that also own and control manufacturing facilities in China.

3. The US bike manufacturer Specialized announced last week that it was laying off 8% of its employees, or some 125 people. This headline comes from the January 17 issue of The Outer Line, a cycling enthusiast newsletter. It goes on to report: “This comes just a few weeks after discontinuation of its ambassador program. While severe economic challenges have impacted companies both across the bike industry (Outside, Zwift, Wahoo, Strava, Pearl Izumi, The Pro’s Closet, etc.), and the wider economy in recent months, Specialized’s pullback signals a significant retrenchment from their early COVID-era aggressive expansion plans, which included purchasing and opening their own retail network and even starting a consumer-direct sales pipeline.

“Outside of the simple fact that the era of cheap capital is over, this retreat confirms that the COVID bike boom was an aberration that pulled future years of consumption forward. The initial misread of the trend by the industry’s major brands, and ensuing production bottlenecks and product shortages, triggered a whiplash effect where there are now too few customers and too little money chasing too much product. Ironically, the industry has come full cycle: the next few years will likely look a lot like the landscape before COVID hit in early 2020.”

This enthusiast cyclist newsletter offers the opinion to affluent consumers that: “…the COVID bike boom was an aberration that pulled future years of consumption forward.” HPS finds this a plausible theory as relates to the market for high-end acoustic bicycles, and worth considering from a consumer research standpoint.

4. Specialized re-organization also impacts European operations. This headline is taken from a January 19 Bike Europe article that reports: “Citing a changing global economy and faster than anticipated changes within cycling, Specialized announced the job losses on January 11. The press release stated that an organisational adjustment will allow the brand to be adaptive and continue to invest in innovation. Giant is another manufacturer taking extreme measures to future-proof itself. In December the company wrote to its suppliers asking for payment postponement.

The article shows a picture of the new Specialized European headquarters located in Arnhem, the Netherlands, and also says: “A representative of the European operations, confirmed to Bike Europe that employees in Europe are also affected by the layoffs, but no further details were given than what was in the press release coming out of Morgan Hill. It leaves the question, who will be the next big brand to announce strategic repositioning this winter? Watch this space.”

HPS agrees with Bike Europe, and is also watching for who will be the next big brand to announce strategic repositioning this winter.

5. 2023 may be a rollercoaster for e-bike prices. For those of you who follow electrek, you know Micah Toll writes an article almost every day. This one ran in the January online consumer newsletter, and offered the opinion that:

“Prices in the electric bike industry spent years with relative stability until the pandemic’s many ripple effects wreaked havoc on the industry. Over the last few years we’ve watched prices rocket up and then plunge back down again in a matter of months, only to repeat. Many riders had hoped to see 2023 bring with it a return to normalcy in the industry. Based on the several recent price changes across many companies, that doesn’t appear to be the case.”

The article ends: “With only a week into 2023 and no stability in sight, don’t expect to count on this being the year that prices drop back to normal for good.”

From what HPS has seen since this article posted, 2023 will be a rollercoaster for e-bike prices, primarily DTC, but spilling over into specialty retail.

6. “Global e-bike brands gather in Las Vegas for back to normal CES.” This is taken from a January 17 Bike Europe article. HPS attended the Consumer Electronics Show in Las Vegas, but came away thinking this headline is slightly overstated.

The stringer who wrote the Bike Europe article states: “Held from 5-8 January, the event attracted more than 115,000 visitors and 3,000 exhibitors. For the 2023 edition, organiser Consumer Technology Association still focused on electric mobility with a growing number of car manufacturers, but also a multitude of e-bikes brands. A hot topic this year was vehicle-to-everything (V2X) technology, which continues to catch the attention of more companies.”

HPS agrees that V2X technology will be a hot topic in the bicycle market going forward, as was shown and demonstrated at the PeopleForBikes SHIFT-22 Conference. However, a “multitude of e-bikes brands” is an overstatement. The brands identified in the rest of the article are Komda, Invanti, LUL, Vinfast, Cake, and RCA.

HPS’s Mike Fritz advises anyone wishing to attend CES in the future to study the hall layouts and attendees and make a plan for efficiently navigating and visiting exhibiters. Otherwise, the size of the show is overwhelming.

7. VanMoof asks investors for additional funding to continue operations. A January 24 Bike Europe article announced: “The trendy Amsterdam-based brand VanMoof has seen its turn-over hike since 2017. A strong global branding made it an attractive investment for private equity. But VanMoof has also experienced the back side of the current supply chain problems, just like many others in the industry.

“Without a capital injection, the company warned its future was in danger within two months,” reported the Dutch financial newspaper FD yesterday. The preliminary annual report for 2021, which was filed just after the turn of the year, stated that the e-bike manufacturer was discussing with investors and suppliers to pay between €10 and €40 million. It now appears that only existing investors participated in the latest capital injection. These include London-based investment firms Balderton and China’s Hillhouse.”

HPS notes that this situation may be attributable to the company’s original business plan, and not reaching the revenue required to cover expenses in the face of declining sales.

8. Amprio confirms take-over by SRAM. On January 5 Bike Europe reported: “This week Amprio confirmed the take-over of the e-bike components business of Rheinmetall by SRAM. Bike Europe learned from industry insiders that SRAM is now taking serious action to join the e-bike boom.

“SRAM is late coming to the e-bike electric propulsion system party, and any acquisition in Europe now has a higher risk attached to it because of the economic conditions brought on by the Ukrainian war. With this said, SRAM has a good solid reputation as a drive train and system source, and a European supply base will be beneficial against established competitors in the EU.”

9. McKinsey-WFSGI study reports industry braces for headwinds. On January 26 Bike Europe announced the WFSGI and McKinsey annual report “Sporting Goods 2023 – The need for resilience in a world in disarray.”

“ZURICH, Switzerland – Rising costs, the looming threat of larger recession, low consumer confidence and continuing operational challenges are set to create headwinds, according to sports and bicycle the industry executives. This is one of the key findings from the WFSGI (World Federation of the Sporting Goods Industry) and McKinsey latest annual report.

“In 2022 consumer sentiment was improving month-on-month, reflecting looser COVID-19 restrictions in most markets, companies were placing large orders, both in anticipation of demand and to avoid the supply chain challenges of 2021, and performance in the first half of the year was widely positive. However, inflation was picking up due to the impacts of the war in Ukraine, with higher raw material and energy costs prompting some companies to raise prices. In the meantime, consumer sentiment showed signs of deterioration with -40% consumer’s net intent to purchase sporting goods items, and discretionary spending declined. Supply chains gradually became more reliable, but the sudden increase in available product in destination countries paired with declines in spending led to widespread overstocking.

“According to the WFSGI and McKinsey, 2023 is expected to be a challenging economic environment with continuing subdued consumer sentiment. This will require a holistic approach from sporting goods companies to focus both on preserving demand and building resilience. WFSGI and McKinsey write that in 2023, four key themes will shape the industry:

“Brand relevance: Sporting goods companies are among the most effective brand builders in the world. As consumer expectations rise and brand relevance deepens, brand building is expected to become more important.

“Sustainability: Accelerating decarbonization and scaling circular business models will be key for sporting goods companies to meet their aspirational sustainability targets.

“Nearshoring: In an era of supply chain disruption, more companies are likely to turn to nearshoring as an element of de-risking and speeding up their supply chain strategies.

“Industry is profitable growth for private investments: The success of sporting goods brands has attracted a wave of private investment. This is especially true for complementary brands, brands with an elevated digital interaction with consumers, and analytics at scale.

HPS will study and analyze this report in detail, and advise clients of its findings. Clients and interested companies and individuals should obtain the report and conduct their own review, keeping in mind that the U.S. bicycle business stands apart from the European bicycle business, and both are subsets of the sporting goods markets in Europe and the U.S.

10. Council member’s bill would ban e-bikes, e-scooters in NYC. This is from a January 26 Bicycle Retailer and Industry News (BRAIN) online article that reports: “A New York City council member introduced legislation a week ago to ban e-bikes and e-scooters until they can be made safer and called for them to be treated like motor vehicles.

“The bill, put forth by Robert Holden on Jan. 19, would repeal the 2020 law that made e-bikes and e-scooters legal in the city and calls for a $500 fine. It would not include electric wheelchairs or other mobility devices designed for those with disabilities.”

This is serious and immediate. The Micromobility Reporter (TMR) lead story this month, “It Is Our Problem!” focuses on the importance of the American bicycle industry trade association recognizing that all e-bikes sold in the U.S., and all lithium-ion batteries used to power e-bike propulsion systems, are within their purview and responsibility.

The National Bicycle Dealers Association (NBDA) has actively engaged with the New York City Council and the Fire Department of New York City, along with UL and CPSC, to find solutions to the New York City e-bike lithium-ion battery fire problem, and do so in a manner that will not result in the banning of e-bikes.

11. Rad Power CEO: “We recognize that we have made mistakes.” Several trade publications, consumer publications, and new media reported this, and the latest is a January 27 article published online in BRAIN.

“Rad Power Bikes CEO Phil Molyneux said in an e-mail to customers this week that the company has made mistakes and will learn from them. In the past year, the direct-to-consumer brand had three lawsuits filed against it, including one for a wrongful death of a girl riding as a passenger on one of its bikes.

“As a young company, we recognize that we have made mistakes. Now we are dedicated to learning from them,” said Molyneux, who succeeded founder Mike Radenbaugh in November. “The culmination of these efforts represents the ‘New Rad,’ one that combines the forward-thinking innovation of our early years with the knowledge and resources to make us more customer-focused than ever before.

“In October 2021, Rad Power announced that its latest $154 million financing round brought in a total of $329 million in investments since its inception in 2006. The company claimed then it was the world’s best-funded e-bike brand, at least in the direct-to-consumer market.”

Micah Toll of electrek is fond of referring to Rad Power Bikes as the largest e-bike brand in North America, and he bases this in large measure on the $329 million in investment since 2006. True, the Rad DTC sales figures are impressive, but as the title of this article states: Confronting Shrinking Sales After a Pandemic Driven Boom.

HPS would not have advised the president of Rad Power Bikes to make the statement about a “New Rad,” but we were not asked either. Watch Rad carefully from this point forward as the market and financial pressure rises.

12. Giant Group buys minority share in Stages Cycling in $20 million deal. This article was also in several trade publications, and this is from a BRAIN January 27 online article:

”Giant Group has made a $20 million investment in Stages Cycling, acquiring 32.5% of the company’s common stock according to a filing with the Taiwan stock exchange.

“Stages, based in Portland, Oregon, makes stationary smart bikes for the commercial gym and home markets, crankarm-based power meters, and GPS bike computers. Giant has manufactured some of Stages smart and commercial indoor bikes for several years, and Giant also distributes some Giant-branded Stages GPS computers to its dealers globally.

“According to the announcement in Taiwan, on Jan. 20 Giant’s board approved the purchase of 32.5% of Stages Cycling Inc. common stock for $6.5 million and Stages Cycling’s convertible corporate bonds for $13.5 million. Giant made the investment through its subsidiary Gaiwin US I Investment Inc. 

“Giant said its strategy is to expand Giant Group’s presence within the indoor cycling market and to build Giant’s ‘cycling ecosystem.’”

Even in good times, this would have been an unusual acquisition. Giant just bought about one-third interest in a large customer for not a lot of money, depending on what the financials of Stages Cycling Inc. look like.

The convertible corporate bonds will convert to stock, in which the value of the 32.5% common stock convert to over another 64%. We may be wrong, but HPS analysis is that Giant just pulled a relatively large OEM customer of its fitness plant out of a financial crisis for now.

13. What tracking one Walmart store’s prices for years taught us about the economy. This last article is from a January 26 NPR article that shops a Walmart store in Georgia, in Liberty County, just south of Savannah that was shopped in 2019, before the pandemic and inflation. This normally wouldn’t make our newsletter, but out of the hundreds of items NPR put in its shopping cart for comparison, one was a bicycle!

Note that the last item above is a “Girls bicycle with training wheels.” The brand is Kent, and the Package Price in August, 2019, was $68.00. The Package Price December 2022 is $98.00, an increase of 44%.

We don’t know any more about the bicycle itself, or whether it was imported or assembled at the Kent-owned Bicycle Corporation of America plant in South Carolina. What we do know is the retail price leader, Walmart, had an inflationary price increase of 44% from the summer of 2019 to the winter of 2022 in the retail price.

While HPS is not aware of any similar retail price tracking in the industry, this one example may explain, at least in part, why the American bicycle business is confronting shrinking sales after a pandemic driven “boom.”

Contact Jay Townley:


The following is taken from The Outer Line, December 14, 2022. While the audience is primarily adult enthusiast cyclists, HPS found the author’s observations compelling as related to the overall American bicycle and e-bike business. We edited the original article for easier reading.

A few weeks ago, we commented on the turmoil and downsizing occurring in the cycling and other niche sports media platforms. As economic headwinds and uncertainties continue, this trend continues to intensify – in both the overall media business as well as the broader bicycle industry. With declining ad revenue and more hesitant subscribers, media platforms across the board are tightening their belts.

Substantial cuts have more recently been made at mainstream media firms like CNN, the Washington Post and USA Today. As former CNN host Brian Stelter put it in an essay for The Atlantic, “Media Winter is here once more, and it is getting ugly.” 

It seems that a “prerequisite for working in media in the 21st century is a tolerance for turmoil and constant change, continuing consolidation and ownership change; politicians and CEOs like Elon Musk fighting about coverage, AI threatening to replace writers, and not to mention that the pay is often terrible.” And it may be tougher in smaller niche media markets like individual sports verticals.

Another observer summarized it more concisely, saying, “Media is one of the worst businesses known to man.”  And it’s not just in the media. Layoffs have spread far beyond the editorial side in the cycling world, just two years after the historic “COVID boom.”

This retrenchment was best illustrated by COVID-darling Wahoo reportedly laying off at least 15 percent of its staff – likely largely due to over-extending itself after incorrectly assuming pandemic consumer habits would remain even after things returned to normal.

In addition, its partner turned competitor, Zwift, released a smart trainer significantly undercutting Wahoo’s indoor riding products. Strava has also reportedly laid off about 15 percent of its staff, as did The Pro’s Closet. And Specialized just discontinued its special ambassador program.

Beyond being a reflection of the current economic and financial headwinds, all of these recent developments also suggest that rather than COVID causing a boom in consumer spending, it may have just brought forward several years of spending. Hence, because of this over-optimistic forecasting, we will likely see the industry enter a prolonged lean time.

If you find this as interesting as we did, let me know:


On January 4, 2023 Human Powered Solutions will attend a virtual public meeting between the United States Consumer Product Safety Commission (CPSC) and PeopleForBikes (PFB) that Erika Jones, PFB counsel, requested.

This virtual meeting will last 60 minutes. It will be devoted to questions that PFB will ask CPSC about the December 19, 2022, memorandum from Robert S. Kaye, Director CPSC Office of Compliance and Field Operations, to 2000 manufacturers, importers, distributors, and retailers of micromobility devices, including e-bikes, for consumer use.

Below we have provided a chronology of events from December 8, 2022 through December 31, 2022 covering some of the most important communications we are aware of relative to the January 4 public meeting.

HPS will continue to keep our clients and TMR readers informed and up to date on events involving and affecting e-bikes, lithium-ion batteries, voluntary standards, testing and certification.

Please contact me you have any questions or require copies of any of the communications, articles or documents listed below at


Chronology of events: e-bikes, lithium-ion batteries and UL2849

December 8, 2022: Consumer Reports investigative article by Stephanie Clifford: “Fire! Fire! Fire!” The Perplexing, Deadly Electric Bike Problem.

December 8, 2022: PeopleForBikes Zoom meeting of electric bicycle sub-committee.

December 9, 2022: Press release: commissioner Mary T. Boyle statement on lithium-ion battery fires and e-bikes

December 18, 2022: Letter from Heather Mason, president of the National Bicycle Dealers Association (NBDA), to chair Alexander Hoehn-Saric, U.S. Consumer Product Safety Commission re: electric bicycle (e-bike) certification to UL 2849.

December 19, 2022: Memorandum from Robert S. Kaye, director CPSC Office of Compliance and Field Operations to manufacturers, importers, distributors, and retailers of micromobility devices for consumer use.

December 20, 2022: Statement from chair Alexander Hoehn-Saric on CPSC letters regarding micromobility battery safety.

December 20, 2022: Letter from Heather Mason, president of the National Bicycle Dealers Association (NBDA) to NBDA members to share an update regarding e-bicycles, certification, and safety.

December 20, 2022: Bicycle Retailer and Industry News online article titled: Dealer association asked CPSC to make statement on e-bike standards.

December 21, 2022: E-mail from PeopleForBikes to members: Update: CPSC letter on micromobility devices. This e-mail announced “…an upcoming meeting to discuss” the implications of the CPSC memorandum of December 19 scheduled to take place January 4.

December 23, 2022: Public notice that Joel Recht and other CPSC staff will meet with Erika Jones, counsel, and representatives from PeopleforBikes to discuss lithium battery safety on micromobility products January 4, 2023.

December 23, 2022: Jay Townley received a return phone call in the afternoon from Joel Recht, CPSC deputy director for Hazard Identification and Reduction, requesting an e-mail address and stating that he would e-mail instructions January 3, 2023, for linking via Webex to observe the scheduled January 4, 2023 public meeting with PeopleForBikes. Recht stated this will be a virtual meeting.

December 29, 2022: Why Taking Leadership In E-Bike Safety Is Essential by Claudia Wasko, VP at Bosch E-bike Systems Americas, Forbes Business Development Council Post.

December 31, 2022: E-bike batteries raise safety concerns amid rise in fires: “Very hard to examine” article by Peter Charalambous, ABC News.


There are several things going on relative to this headline, including the fact that COVID-19 and its variants are still with us after almost three years. For the American bicycle business, COVID-19 has been turned loose in epidemic proportions on our largest supply source of bicycles and e-bikes.

A December 28, 2022 article in the Economist Weekly edition states, “After nearly three years of self-imposed isolation, China is opening up again. The domestic travel restrictions, mass-testing requirements and draconian lockdowns of the ‘zero-COVID’ policy were scrapped in early December. On January 8 China will reopen its borders too. People arriving from abroad will no longer have to quarantine. More flights into China will be allowed. Visas will be granted to business travelers and students (though not yet to tourists). And Chinese nationals will be allowed to travel abroad without needing to provide the authorities with a reason.”

There are no accurate figures on how many Chinese people have been and will be infected, but it is clear the government will not report the real numbers. It is now estimated by sources outside of China that as many as 250 million Chinese have come down with COVID-19, and that 1.5 million will die as the urban wave peaks in January, just as the Lunar New Year begins.

On January 20 factories shut down and workers in the urban areas of China leave for their home villages in the rural provinces, some taking COVID-19 with them.

The human suffering and loss of life is tragic. It also means the disruptions to bicycle and e-bike manufacturing will continue after the Lunar New Year into February and March as COVID-19 closes manufacturing facilities and workers become ill and are delayed returning to work.

We have not seen the final import data for 2022 yet, but based on 2021 import data China was the source country for 86.8 percent of all the bicycles and e-bikes imported into the U.S. (See the NBDA U.S. Bicycle Market Overview 2021 Report, Table 22, page 45:  

This also means the brands will have difficulty balancing their inventory of finished goods because of the Q-1 2023 disruptions to their Chinese-based supply chains.

The only good news is the disruptions to the Chinese supply chain will mean a Q-1 slowing of imports of low-cost e-bikes under the de minimis rule.

If you have questions, contact me at:


I am writing this on the last day of 2022, a year that literally went from a supply chain nightmare of scarcity to the discomfort of surplus.  

From what I have been reading in the trade press in Europe and the U.S., there has been a tendency in the bicycle business to not acknowledge this excess inventory. When its existence does slip out, as it did recently with Giant, there is an uneasiness about the financial implications of the surplus.

In general, the sentiment seems to be that good sales this coming spring will ease the situation and bring inventory levels back to what is referred to as “normal circumstances.”

This to me is the big if: IF consumer demand results in good sales this coming spring. This also smacks of management by hope.

I realize the bicycle business in the U.S. is trying to be as proactive as it can relative to attracting consumers to bicycles and bicycling, including e-bikes. However, I fear the mainstream bicycle business doesn’t have all the customers and potential customers in focus, and as the result isn’t able to connect with and sway enough of them.

My premise is based on the excellent consumer research done by Sports Marketing Surveys, now known as Sporting Insights, for the NBDA in Q-4 2021 and published Q-1 2022 by the NBDA:

This consumer research uncovered the fact that approximately 30 percent of adult cyclists were new to cycling, depending on the category, and a higher percentage were female compared to historic demographics. In the case of e-bikes, many wanted throttles and “BMX” styles.

You can dig deeper into this detailed consumer research study, but one of my take-aways was the bicycle business had attracted new and different adult purchasers during the pandemic in 2020 and 2021, but before we could study them, many quit walking into and purchasing from bike shops.

Consumer demand drives everything in our world, sales, forecasts, production, shipping, and inventory of components and finished goods. Everything! When consumer demand drops off so does everything else. When too much inventory is in the bicycle supply chain when consumer demand slows, an overhang of surplus inventory results, like a blockage in a pipeline.

In the case of the bicycle business in the U.S., we don’t really know why consumer demand slowed during Q-3 of 2022, or why it continued to drop below pre-pandemic levels of sales during Q-4.

Some additional consumer research focused on the e-bike segment has been done recently, but I believe the panel size was too small. Although I am not privy to the methodology or results, I don’t believe it captured consumer purchase information or future intent from a group that may represent both the problem and the solution.

What I am speaking about are the American consumers who have purchased directly from e-bike sources in China under the so called de minimis rule.

While this is direct-to-consumer (DTC), it is a piece of the American bicycle business that is mostly not being tracked, although DTC purchasers and riders were included in the NBDA consumer research I have referenced.

The fact that they are not tracked is because de minimis import transactions are not recorded by U.S. Customs, and do not show up in the statistics followed by everyone in the business, including the trade associations, Ed Benjamin at LEVA, and Human Powered Solutions.

American consumers purchasing an e-bike or regular bicycle valued at $800 FOB or less can have it shipped directly to their home addresses with no duty, tax or inspection, and no record of the transaction.

If you are wondering if there are a lot of these transactions, the U.S. Congress reports there are 2 million of them in the U.S. every day. We have provided detail about why America has de minimis transactions and the attempts to stop them in previous articles. Contact me if you would like to know more.

From the buzz we have been picking up from advocates and bicycle riders, the number of adults and teenagers passing them on unrecognizable no-name e-bikes has increased in recent months. Bike shops are also reporting more of this type of e-bike being brought in for service.

Bottom line: we will not know until the NBDA conducts the same type of consumer research as it did during Q-4 of 2021 with the same robust panel of 2,500 adults, using the same methodology as the previous study, which included DTC purchasers like those buying under the de minimis rule.

Meanwhile U.S. inflation hit a 40-year high at 9.1 percent at the end of 2022, and the economic picture does not present a high probability of consumers coming back to bike shops to make purchases this spring, although the unemployment rate is at 3.5 percent, tied for the lowest since 1969.

So combined with other economic factors, we will have to wait to see IF consumer demand and sales this spring will reduce the current excess inventory to “normal circumstances.”

HPS will continue to report on this situation, and I welcome your comments. You can contact me at: