As the shiny star of electric bikes continues to rise, some entrepreneurs are banking on car dealerships to boost their sales—as accessories for drivers.
For Bill Klehm, CEO of Dallas, Texas-based e-bike company, eBliss, “the future of bikes is cars,” writes the Globe and Mail. The phrase captures the former car salesman’s intuition of a vast, untapped market for e-bikes—among motorists inclined to switch from their four-wheelers to two wheels, at least for those “last mile” trips to the coffee shop or gym.
Certainly, there are vast amounts of money to be made at various points in the supply chain. Valued at US$17.56 billion in 2022, the global e-bike market is projected to exceed $44 billion by 2032. In the United States, the business was worth $1.98-billion in 2022, and is expected to increase at a compound annual growth rate of 15.6% by 2030, the Globe writes.
But achieving that success depends on getting the bikes into the hands of satisfied customers.
With direct-to-consumer delivery suffering quality control issues, and specialty bike shops still thin on the ground, Klehm sees a sales opportunity in partnering with car dealerships.
“There’s 2.3 million people that visit car dealerships every day to buy something transportation-related,” he told the Globe. “There’s natural foot traffic there that I think we can leverage on to help us sell e-bikes into the community.” Customers may not have a bike in mind when they enter the dealership, but they may well have one in hand when they leave—with their new car—having been persuaded that bikes are better for those last mile trips.
It makes sense from the consumer’s point of view, since short trips are actually quite expensive, costing an average of 50¢ per mile (31.25¢ per kilometre) for fuel and wear and tear. A savvy salesperson could contrast this to the 1/3 of a cent it costs to ride an e-bike the same distance.
Klehm also pointed to the environmental savings: “The worst thing for the environment, and the worst thing for everybody, is to drive a vehicle with 63,000 parts one mile.”
And right now, Americans spend a lot of time driving that one mile, he adds, with 50% of all car trips in the U.S. spanning less than three miles (or less than five kilometres).
With 17,000 franchised auto dealers in the U.S. making US$1.7 trillion in annual sales, the potential is huge, although the sales pitch may encounter problems where dealerships make big profits servicing vehicles—since “no maintenance” is a key selling feature of Klehm’s eBliss. That disconnect sank earlier efforts by Volkswagen to sell e-bikes through car dealerships in Europe.
But Klehm said he’s banking on shifting consumer interests and car dealerships seeking new revenue sources. “So far eBliss has 50 dealership chains signed up,” reports the Globe, with first delivery of e-bikes expected in the first quarter of 2024. Hopes are that the chains will be selling 60 bikes per month within six months.
And change is coming to Europe, as well. Porsche and Audi have entered the e-bike market, one sign of the shifting zeitgeist, writes the New York Times. Volkswagen is trying out another path to expand its e-bike market share, having “recently teamed up with Pon, a Dutch company, in a venture focused on leasing bicycles to workers via their employers, with an eye to expanding in Europe and the U.S.”