Electric bike prices - ever increasing?

[Steven Brandist]

I've been following the electric bike market with increasing attention for about 3 years now. The interest was awakened by A to B magazine, my initial purpose for subscribing was a keen interest as to whick folder to buy. I bought a Riese Und Muller Birdy in January 2001. (BTW: if you don't, then subscribe to A to B - an excellent read and with independent reviews that you won't get with the glossy short attention span 'cycling' mags).

I was just on the verge of buying a Giant Lafree/Twist when Giant pulled the plug. Towards the end of the Lafree/Twist's life they introduced higher and higher spec models. These seemed pricey at the time, I think the most expensive as £1250 (they seem good value now).

Since then I've been following the market closely, but I notice that prices are continually rising (at least for the most attractive products). For example: the latest Torq offering is £1250, Gazelle Easy Glider £1460, and so on.

Surely there must be pricing ceiling that we as consumers are willing to pay?
Are we getting a better product for our money, or are the importers/middlemen making a bigger profit on the back of an increased market size?

Steven

 

[flecc]

After deduction of VAT, 50% of the remaining price is typically the importers gross margin. This might seem high, but it's typical for all retail in the UK, and of course usually covers premises, wages, distribution, support costs, administration, insurances and company taxation.

There have been some increases in base prices as raw materials around the world have become increasing scarce as a direct result of China's manufacturing boom, and these have made things worse. And all energy prices have been leaping.

The incorporated batteries using newer technologies are much dearer to produce and that also gets reflected in the price, for example the doubling of the battery price element in the Powacycle LPX versions over the NiMh versions, and the leap in the price of the eZee Liv due to enforced inclusion of the Li-ion battery, this due to the sort of materials shortage referred to, this time nickel.

Manufacturers and importers tend like all suppliers to hold back on minor increases due to rising costs, and use the occasion of a bigger cost increase to incorporate the accumulation, making the leap quite sudden and large. Whether consumers prefer this or would prefer almost weekly slight movements is a moot point, but the latter would be administratively more difficult and lead to even higher increases.

I can't see any prices coming down in a long time, the only thing making real reductions possible would be a huge increase in e-bike popularity and market size. In an assured very large market like cars, where manufacturers bear most of the advertising costs and give extensive support, main dealers operate on 17% margin, very low by most retail standards and a big benefit to car buyers. We are light years away from such a position.

One exception in the cycle trade, due to a very stable product which is the unchallenged market leader in it's niche is Brompton. They operate with 33.3% margins in their suggested retail prices, knowing that dealers have an assured risk free saleable product.
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[Ian]

Hasn't there recently been an increase in import duty from the far east. I seem to recall David from Wisper warning about it.

 

[flecc]

Yes there has Ian, I left that out of the above list.

it's not just a UK thing of course. One glance at the prices of the new Twist, Sparta Ion and Gazelle Easy Rider shows how expensive things are getting from there, and even in their base countries.
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