eBikes: Exciting Development in Green Transportation

Pollution from automobiles is a rampant problem in developed societies around the world, and as emerging economies such as China and India become more prosperous, a larger percentage of the population is able to afford personal transportation. This might lead the environmentally conscious to worry about an immense explosion in the number of cars on the road –and indeed, the number is rising.

But unlike many western societies where the standard of personal transportation rests firmly in cars, trucks, and other gas or diesel-based automobiles, not every nation is closed off to greener ideas. China, in particular, has been experiencing a widespread increase in per capita income, but rather than focusing on a nationwide boom in car sales, recent news in transportation from China has centered around the spectacular rise in the use of electric bikes.

These “e-bikes” aren’t simply a trend; considering that twenty one million of the devices were purchased in China last year alone, compared with just under ten million cars, it’s clear that e-bikes have become a staple of metropolitan and urban life in China. There are a number of reasons for the incredible success of these machines. Primarily, e-bikes offer commuters an affordable way to get to work or buzz around the city. Models are typically around $300 US and while occasional battery purchases are necessary, the price comparison with fuel needed for traditional automobiles is decidedly in favor of the electric bicycles. What’s more, the machines are whisper-quiet and don’t release any smelly or noxious fumes that many riders praise, noting that the alternatives of motor scooters and motorcycles can make for unpleasant breathing on the road.

Though motorcycles and other variants on small personal transportation units are still fairly popular in China and allow riders to enjoy a higher speed limit, recent taxes and fees placed on such methods by the government has resulted in a significant cost difference, sealing the deal for many of China’s people on the move. The industry as a whole is expected to expand into new countries, primarily in Southeast Asia and surrounding areas, and exciting technological improvements will likely be in the works for quite a while.

Recently, battery giant Advanced Battery Tech (ABAT) partnered with and subsequently acquired e-bike superstar Wuxi Angell in a move that has been the cause for Wall Street rallies even in the face of a less-than-perfect quarterly report from the company.

Representing an immense potential for the future of transportation in emerging economies and around the world, ABAT is set to increase production capacity and tighten cost controls to take full advantage of China’s e-bike boom, which is a promising candidate for a bloom in production and sales despite the global economic downturn. As talk of expanding electric cars and other related technologies based on developments in research and design of e-bikes abounds, many investors are gearing up for an exciting period in green transportation.

Comments

[John Petersen:]

I've been following ABAT's business for a year and they have always stood head and shoulders above other Li-ion battery manufacturers with sound profit margins and very tight control over cost. If they can do half as well with the Wuxi Angel acquisition as they did with their core business they'll be a very successful diversified company. I'm sorry to see them leave the ranks of pure play battery stocks that I write about, but they're a fine company that merits a closer look.

Jul 01 06:32 AM

[Alphameister:]

Management clearlly raised the ante with their purchase of Wuxi Angel, but I'm betting their decision will be all to the good for owners of ABAT stock. It's one of my largest positions and I'll be surprised if it is not making all-time highs by the end of this year. Will probably add more, spurred by your very helpful comments regarding the e-bike market in Asia.

Jul 01 08:44 AM

[jerrydd:]

My problem with Ebike especially from China is their very low quality. Plus the batteries are poor causing expensive replacements.

The company that comes out with a reliable ebike, battery and charger is likely to do very well as word gets around.

I ended up building a large 3wheel moped EV myself to get reliability at low cost. It gets the equivalent of 600mpg and has a 40 mile range and recharges in 2 hrs from any 120vac outlet. I'm going to put a cabin on it soon to make it all weather.

A 45-55 mph version with 60 mile range would be easy to do and should make a good profit selling for $5-6k. After all it's little different than a golf cart, just parts used differently.

Jul 01 10:46 AM

[John Addison:]

Good article about the growth of ebikes in Asia. Giant Bicycle (9921.TW) also participates in this growth. I own Giant.

Jul 01 10:54 AM

[User 416531:]

what about batteries by the fabulous company VSPC?

Jul 01 12:35 PM

[31October:]

Bricklin's 1990s e-bike was a total failure. But there is insane growth around Chinese dormitory factories and tech centers -- whoever can make bikes cheaply should be very rich. China also has a better relationship with lithium-rich areas that the USA does, so Chinese battery makers will win.

ABAT looks good, and I have bid on them a few times. But it is purely a matter of Communist politics as to whether ABAT corners the market. In New Jack City "everything is business," but in China, everything is politics.

Jul 01 02:02 PM

[TinyTim:]

"unlike many western societies where the standard of personal transportation rests firmly in cars,"
"an immense potential for the future of transportation in emerging economies and around the world"


I think a key here is "all-weather vehicle" and wonder what the owners of these many ebikes do during monsoon season? I've been on plenty of motorcycles in the rain and it's no fun showing up for work looking like a drowned rat. Perhaps this is what differentiates emerging economies.

Jul 01 03:25 PM

[isaac the t...:]

I have a Giant lithium battery assit bike. I'm 49 and it helps me ride around the hills here in Seattle like I was 34. and my wife says the benefits show up in my bedtime vigor as well.
The bike is real solid and its pedal assist software is excellent. The harder you push- the more help you get. Very cool.

Jul 01 11:37 PM

[Not Worth T...:]

I recently visited three BestBuy stores and all of them feature three different kinds of e-bikes right next to the entrance doors. They look so cool. I am getting the blue one that is listed for $849 apiece. I love that feel of riding on it.

Considering that my workplace is only 2.5 miles from where I live, it is so much fun to ride in the open air. It is better than a convertible. When it rains, I just take the bus. I love using public transportation. Cars are useful, but we don't need them all the time especially when there is only the driver inside the car. Imagine having 2,000 - 5,000 pounds around you moving with you at the very same speed as you do (your car)! Why do we need to drive all the time? Wake up American. Drive only when necessary.

Jul 25 06:55 PM

[HipEbikes:]

You nailed it! Ebikes aren't here to replace the car but they are much fun to be a fad! I mounted a retro-fit kit on my Norco mountainee and using it over the summer has saved me $200 a month in gas money. I use my car when it rains or I need to transport more then just myself but my hip-ebike takes me where I need to go when it's just me. It'll do 25 miles an hour for almost 50 miles and I was able to mount it myself on the bike I already own - Brilliant!

Aug 08 09:36 AM