The Dark Clouds & Green Shoots of LEVs

From Ed Benjamin, LEVA Chairman

As 2023 comes to a close, it’s worth reflecting on the state of our industry. As founder of the Light Electric Vehicle Association (LEVA) in 2006 and eCycle Electric in 1997, I find it more necessary this year than ever to first clarify who I mean by “our industry”. The lines between light electric vehicles (LEVs), a fast-growing part of the larger Micromobility sector, and other EVs are blurry. So allow me to clarify. This address is meant for…

-Bicycle companies that manufacture pedal-assist or throttle-controlled electric bikes (2 or 3 wheeled), and their many suppliers. These products typically max out 28 mph (45 km/hr).

-Stand-up scooter manufacturers, suppliers, and operators who sell or rent these devices.

-New mobility entrants making battery-powered 2 and 3-wheelers that don’t fall neatly into the above: sometimes they have just one wheel, sometimes they’re completely covered, some are faster or slower.

The over-arching similarity between these vehicles, besides all being battery powered, is what they’re not:

-They’re not surrounded by a heavy steel shell (like cars).

-They’re not sold only by licensed motor vehicle dealers

-They don’t require a license to operate.  

Now onto the address.

This has been a year characterized by crisis. I dont mean this in the typical negative connotation of the English word, but in the Chinese sense. In Chinese, the word for Crisis is made up of two characters. The first character represents Danger, and the second character means opportunity. This address sums up the most pressing dangers we face as an industry (Dark Clouds), along with some of the most promising opportunities (Green Shoots). It is also focused on the U.S. market, though our industry is more international now than ever.

The Dark Clouds:

Burning Batteries – NYC is the proverbial “tip of the spear” for regulatory action to prevent LEV battery fires, but is it also the canary in the coalmine for the rest of the country? NYC has unique characteristics that differ from most other hot eBike markets in the US. In particular, high # of deliveristas (60-100k), high Km-travelled per day (>100 miles/day) resulting in high battery swap & charge rates (3-5X per day), wide use of low-quality batteries, and the unfortunate Frankenstein-ing of batteries & chargers through an underground gray market of service & charge shops. The worst-case impact this can have for our industry is out-right bans on LEV parking inside residential buildings, which has already started in NYC. Whether our industry can contain the NYC issue before building parking bans spread to other high-urban density markets like Toronto, Vancouver, Seattle, San Francisco, and Chicago where food delivery by bike is high remains to be seen. 

Inventory: in 2022, initial signs of slowing sales and growing inventory gave the industry its first warning that the COVID sales boom was temporary and most likely over. By early 2023, both of those issues exacerbated enough to prompt mass order cancellations, layoffs amongst OEMs & suppliers, and bankruptcies amongst the less financially stable players. This is a normal adjustment of an industry that has had nearly 400 “brands” in recent years. A sustainable number of brands is probably similar to the number of established bicycle brands.

The Teens & Tweens: on the other side of the country, a trip to one of many West Coast beach-side high-school and middle-school will make it clear: teens and in many cases pre-teens are falling in love with eBikes. Most people would call this a Green Shoot for the industry and sustainable transportation in general, but I’m concerned it’ll turn into a Dark Cloud if we’re not more proactive on regulation and education. These riders are more exposed than adults to injury and fatality being that most are “newbies” unfamiliar with safe cycling practices, product quality in their typical price range is low, and high speeds of these devices, in some cases exceeding the Class 3 28 mph limit. Most in our industry have been closely watching the RadPower vs. INSERT lawsuit play out – and it’s likely that more cases like this will come. 

But enough negativity. There are plenty of reasons for our industry to be very optimistic about the next decade.

The Green Shoots:

1. New Riders – data from PeopleforBikes indicate that cycling rates amongst the overall population are rising. eBike use is a key part of that uptick in cyclists. This doesn’t even consider all the new eScooter-ists, eMoped-ists, and other Micromobility-ists that are choosing light electric vehicles over cars for one reason or another. On a recent tour of UC-Berkeley, I was amazed to see stand-up eScooter users outnumbering cyclists and perhaps even pedestrians.

2. Falling Battery Costs – Li-ion battery prices are expected to drop 40% over the next 3 years as economies of scale and technology learning effects kick into high gear. The overall consumer is winning in this scenario, as long as battery safety improves alongside the price decreases.

3. eBike Incentives – there are now 121 eBike purchase incentive schemes throughout the nation. Thanks to the nicely curated list by RideReview, we can see location, support level, and unique characteristics of each program. As more cities and states catch on to the extremely high bang-for-buck these programs have in terms of meeting climate, congestion, and public health goals, as quantified in the Rocky Mountain Institute’s eBike Calculator, we could see a hundred more in 2024. 

Finally, some recommendations for a more perfect industry.

1. Come together. Tribalism within our industry is alive and well. It’s easy for traditional bike companies, stand-up eScooter companies, and sit-down pedal-less eMoped companies to see each other as competitors. The micromobility industry should focus on what each “tribe” has in common and lobby to policymakers in a more unified way. I think safer streets (perhaps one day re-branded as “LEV-lanes”) and additional incentives for low-carbon light electric transportation is something we can all agree on. 

2. Get proactive and self-regulate: We love eBike purchase incentives, and sometimes we love a laissez-faire government, but in the face of slow safety standard reformation from the CPSC and other agencies, we should be demanding purchase incentives come with a few strings attached: for an electric device to qualify for an incentive, it must show that its battery and charger conform at least to UL 2271. To be even more responsible as an industry, let’s also require that end-of-life battery recycling is well thought out and part of the upfront cost (the way we sell flooded lead-acid car batteries today). At some point, “recommended” safety standards need to be flipped to “mandatory” to ensure a level playing field for the entire industry.

3. Learn from our brothers & sisters: The Western Europeans and Chinese have a 5-20 yr head start on the US in terms of micromobility adoption. While there are important economic, historical, and cultural differences between each region, let’s apply the best of what they’ve done overseas and also learn from their mistakes. For example (Insert), China’s had 70 e-bike related Li-ion battery fires and 400 deaths since 2009 (source, Epoch Time). Each one tragic, but in terms of total vehicle fleet of 300M, the incident rate is small. The EU has similarly low rates of battery fires and resulting deaths per user. What practices from China and Europe can we emulate here in the US?

4. Standardization: as we transition from the early, highly volatile days of market development to a slower and steadier market development, it may be time to develop standards for the most critical components in LEV products: battery and charger. Let’s consider taking the best charging and battery design practices from the industry, and developing a design standard and charging interface standard. This has brought convenience, cost, and safety benefits to smart phone users - the same is possible for our industry. It may even offset the added cost of stricter safety standards mentioned above. More specifically, it’s time we had a common charging plug interface, a mandatory fail-safe charger shut-off mechanism, and open-source communications protocol between charger and battery BMS. While there may be short term winners and losers amongst battery & charger suppliers, the consumer and public will be better off in the long run. It may also open up new business innovation in the public charging & swapping space. Thanks to standards, every time we fill up a car with gasoline we no longer think twice about the quality of the fuel, the dispenser we’re holding, or the gas tank exploding randomly. It’s time to bring a similar level of peace of mind to Micromobility.

We continue to face a bright future. Even brighter as our industry grows and matures. These challenges are simply the bumps along the way.