Can “The Tesla”of Electric Motorcycle Be Generated
Can “The Tesla”of Electric Motorcycle Be Generated
Is there a market for motorcycles? The answer is yes.
According to the data released by the China Chamber of Commerce for Motorcycle, the production and sales of motorcycles in China recovered to 20 million units in 2021, the best level since 2014.
To some extent, the growth path of electric motorcycles may duplicate that of electric cars.
In recent years, electric cars are gradually eating into the market share of fuel cars. According to LMC Automotive, electric cars will account for half of global car sales by 2030. Coincidentally, electric motorcycles have a potential partly due to its replacement of fuel motorcycles. When environmental indicators become the entry threshold, fuel motorcycles are bound to transform.
In contrast, the development of electric two-wheeled vehicles is not easy: at present, manufacturers of light electric two-wheeled vehicles depend greatly on subsidies under the adverse conditions of motorcycle bans, and they cannot make breakthrough in core technologies. To achieve leapfrog development, light electric two-wheeled vehicle manufacturers undoubtedly need to open up a new development route.
According to the report of a Chinese research institute, affected by the pandemic in 2020, the global market of motorcycles in 2021 will show a strong growth of 6.87%, and the market size is expected to grow from 298.58 billion dollars in 2021 to 485.67 billion dollars in 2028. The global electric motorcycle market is expected to reach 69.3 billion yuan in 2026, with a compound annual growth rate of 6.5%.
The recovery of electric motorcycle industry is a flash in the pan or another blue sea?
Industrial revolution is happening
There has always been talk of the “return” of the motorcycles. What does a motorcycle really mean to consumers? With the development of social economy, people’s cognition of motorcycle has long changed beyond “Transportation means”, “cheap and easy to use”. Today, when the consumption power of “Generation Z” rises, motorcycles become a new way of life. Such lifestyle changes can often lead to a restructuring of an industry.
However, although there is still call for the return of motorcycle, but the domestic market is still not so optimistic for large displacement motorcycles, because consumer demand is mainly concentrated in low-end products.
At present, more than 70% of the world’s two-wheeled vehicle market is concentrated in Southeast Asia and China, where the two-wheeled vehicles have a large market demand, but mainly for small and medium displacement models being used as a means of commuting. The demand for motorcycles above 500cc mainly comes from developed regions such as Europe and North America, where motorcycles are regarded as “a big toy” with great entertainment properties.
In the context of carbon neutrality, a quiet revolution is taking place in the motorcycle industry, with heavy electric motorcycles becoming the new development trend. Under this trend, car companies that have enjoyed the dividend of electric vehicles are more sharp-nosed. Now, the electric motorcycle circuit has seen seeded players, and traditional car companies are one of the most active candidates. The impact of the carbon neutrality goal is extensive, with the automotive industry at the forefront. Since then, new energy vehicles (NEV) have become the necessary direction of automobile manufacturing. However, industry transformation is not as simple as it seems. The technological research and development of NEV battery and components is the “obstacle”. For automotive enterprises, the human and material resources required for R&D are a huge expenditure, which requires new development to supplement the funding gap. Thus, the profitable motorcycle is a good direction. Compared with motorcycles, automobiles need a large number of parts, such as airbag, glass, infotainment system, and seat, among others, thus costing a lot more than motorcycles.
The profits of CFMoto and Lifan are the best verification of such views. CFMoto reported the revenue of 4.5 billion yuan in 2020, with a gross margin of 29.3%, according to www.huaon.com. During the same period, Lifan’s financial results showed that the company’s total revenue from motorcycles and parts was 2.56 billion yuan, accounting for 71.3% of its total revenue, and the gross margin was 8.6%. This may be the most direct reason why car companies enter the motorcycle market.
Car companies have plan for the motorcycle field are not in the minority. Honda, Kawasaki, BMW and Ducati all started to develop electric motorcycles in 2021. In China, Geely, Wuling, Lynk&Co and other car enterprises have formally entered the motorcycle industry. Although they have not yet launched any products, but in terms of the domestic environment and situation, electric motorcycles may be their best choice.
”Saviour”of electric two-wheelers
In fact, compared with domestic car companies, electric motorcycles are more significant to electric two-wheeler manufacturers. Industry data show that China is the world’s largest producer and consumer of electric two-wheelers. The ownership of electric two-wheelers in China has exceeded 350 million. In 2020, the sales of electric manufacturers reached 47.6 million units, up 23% year-on-year, and the average sales of electric two-wheelers in the next three years could reach 57 million units.
In recent years, the wild growth of electric two-wheelers has come to an end, and clear macro and micro drivers have emerged:
To actively respond to climate changes, the Chinese government has set the task goal of “carbon peak by 2030, carbon neutrality by 2060”. Carbon neutrality and the new national standard have become the key macro factors driving the development of electric two-wheeled vehicle industry. Moreover, the changes of electric consumers in age groups, regions, personalization and other aspects increasingly affect the manufacturers’ product positioning, especially the design of intelligent products that bring greater user experience.
In addition, to reduce traffic accidents, air pollution and noise pollution, China has implemented motorcycle bans 1985, which has provided a natural cover for defense for the development of electric two-wheelers. Essentially, the road has been paved for electric two-wheelers. But for now, the manufacturers of electric two-wheelers seem so well protected that they have not yet made breakthroughs on key technologies.
Electric two-wheeler manufacturers’ intelligent exploration started from owner APPs. All mainstream manufacturers have equipped their products with owner APP, but the usage rate is very low. In addition, at present, some electric two-wheelers have digital keys. Owners can unlock the vehicle through smart phones or wearable devices, which greatly improves using convenience. However, there are also various security risks, therefore, the smart key function has not attracted more users. If such issues are not addressed, electric two-wheeled vehicles can not have a bright future, which will surely call for transformation. Electric motorcycle is undoubtedly a new direction.
Break the deadlock
The motorcycle industry is replicating the electrification of the car industry. At this stage, the electric motorcycle industry is still in its infancy, and the industry is expecting to generate a leading electric motorcycle brand like Tesla in the electric car area, which will drive the transformation and upgrading of the whole industry through the “catfish effect”.
Electrification has eliminated the technological generation gap between Chinese and foreign motorcycle enterprises. In recent years, China has made impressive achievements in intelligent connection, which is undoubtedly a very important advantage for China’s motorcycle enterprises. Loncin, Lifan and many others have re-valued motorcycle business in the new wave of electrification, hoping to transform itself from a traditional motorcycle manufacturer into an electric motorcycle manufacturer. In the 2021 CIMA Motor, Lifan launched four electric motorcycles, and released the new developing strategy of intelligent electric motorcycles. Zongshen has planned in advance and achieved a balanced development between electric and traditional motorcycles. However, it will not happen overnight to become an electric motorcycle leader, instead, it will be a long process.
Breakthroughs in motor, battery and electronic control system as well as in intelligent system will be the focus of competition for electric motorcycle manufacturers. Electric motorcycle manufacturers need to focus on overcoming the application limitations, such as temperature and cruising range. Fuel-powered motorcycle consumers are obsessed with speed and performance, and advanced electric systems are key to attract them to electric motorcycles.
Automakers have long been plagued by high battery costs, and such will be the case for the electric motorcycle industry. China’s electric two-wheeled vehicles mainly use lead-acid batteries and lithium batteries, with the cost of battery accounting for 30%-50%. Due to its low price and high stability, lead-acid battery has always been the main battery type used on two-wheeled electric vehicles in China, but it causes environmental pollution during the manufacturing process. In addition to the disadvantages of high price and poor stability, lithium battery has features low pollution, high energy density, long life and quick charging. Thus, the government actively promotes the replacement of lead-acid battery by lithium battery in the two-wheel electric vehicle industry. To address the problem of high EV battery cost, in addition to technical breakthroughs, the impact of international raw materials on battery cost should be mitigated. Besides, downstream manufacturers must also participate in the technological R&D of battery systems, improving effective control and service life of the battery from the application end.
Many electric motorcycle enterprises and power battery manufacturers have carried out extensive cooperation. For example, Supersoco has cooperated with CATL to develop battery technology and more advanced control systems to reduce battery costs.
In addition, digital transformation of electric motorcycles is also a key concern for electric motorcycle manufacturers. With increasingly mature 5G, IoT, distributed operating system, AI, big data, and cloud technologies, electric two-wheelers have more choices to go intelligent. Manufacturers have made a lot of attempts. We have seen many products equipped with Internet and basic voice interaction capabilities on the market.
At present, the application of intelligent technologies on electric motorcycles is mainly about safety and experience. The most common technology is self-balancing driver assistance system. However, this technology is not so welcomed on motorcycles as on cars as driving experience is what many motorcyclists chase.
There is good reason to believe that electric motorcycles will bring new growth to the motorcycle industry. We can expect that Chinese motorcycles will stand on the world stage with a new look and a new story.