Leading electric bike maker VanMoof is betting the cost-of-living crisis will lure more consumers to buy its products over cars, which is a rarely positive note as rising inflation weighs on businesses worldwide.
Co-CEO Ties Carlier said the Dutch manufacturer is targeting more urban commuters as high fuel costs and continued pressure on consumers’ wallets are forcing many to seek cheaper alternatives to cars and public transport.
Though VanMoof has had to pass some inflationary costs on to customers, the rising cost of living is “really good” for the company, Carlier told the Financial Times.
“An e-bike is the best alternative for [a car] In the city . . . Luckily it is also one of the most affordable solutions compared to a car, definitely, but even compared to public transport in London.”
The start-up, whose bikes range in price from £2,248 to £2,998, expects another boost after the coronavirus lockdown led to a surge in demand for e-bikes. VanMoof reported a tripling of sales in 2020, the most recent year it reported numbers for, and helped its customer base reach 155,000 drivers.
Carlier’s optimism is echoed by companies across the industry. Last year, the CEO of Bosch eBike Systems, one of the largest suppliers of e-bike parts in Europe, told the FT that half of the pedal bikes sold in the region will have a motor by 2025.
But VanMoof doesn’t see conventional bikes as its main competition, Carlier said.
“Our competitors are the car brands,” he added. “[We now see customers] only use the car for the essentials outside of the city, but use the bike for the city trips. [Or] Ditch the second car and get an e-bike or two in its place. . . Cars are not just about fuel [that costs money]it’s the wear and tear, the parking.”
VanMoof had raised €179.2 million ($175.9 million) from investors as of December last year, making it the most funded e-bike startup in Europe, according to FT sister publication Sifted. Carlier said the company is targeting profitability by 2024.
But despite expecting to benefit overall from the rising cost of living, the manufacturer has faced headwinds from recent supply chain disruptions that have pushed up its own costs.
At one point, the price of semiconductors went from 80 cents to as much as $30 per chip, Carlier said. Due to recent lockdowns at China’s Shenzhen manufacturing hub, initial deliveries of VanMoof’s latest bike, the S5, have been delayed by three months, he added.
But Carlier said VanMoof mitigated the impact of disruptions to cross-border trade by largely concentrating its supply chain in Taiwan, where the chief executive is based.
Asked if he was concerned about China’s increasing threats against Taiwan, Carlier said he was “not that concerned”.
“Because we’re gathering in Taiwan, I think we’re less vulnerable because we [also get most of our parts] from Taiwan,” he said. “You are less at risk than if you assembled your bike in Turkey or Portugal, for example. . . and you have to source your components from all over the world.”
https://www.ft.com/content/156ed90d-b609-4a71-9a38-79805f23556a VanMoof Says Cost-of-Living Crisis Is “Very Good” For E-Bike Sales