Electric bicycles are disrupting the motorcycle market
Like most disruptive innovations, the motorcycle industry doesn’t realize it’s being disrupted
Many people are wondering why Harley-Davidson is sinking or why electric motorcycles aren’t more dominant already. A large part of the explanation is from the The Innovator’s Dilemma, Christensen and Raynor’s key work which is explanatory of so much in this rapidly evolving time. People are simply looking at the wrong segment of the market — at motorcycle manufacturers instead of electric bicycle manufacturers.
Disruptive innovation is straightforward and proven empirically. Market leaders on the top line are full-featured and have the loyalty of the most demanding customers. An innovator coming in with a much less fully featured solution which meets enough of the requirements but at a much lower price point or with convenience that is unmatched by the market leader will find a market niche. Over time, the innovator will grow their capabilities to meet close to 100% of the market and maintain their innovative differences. The former market leader is eventually left with only a tiny slice at the top end of the market. This has played out in photocopiers, photography and transportation along with many other domains multiple times over the past decades.
Motorcycles are represented on the top line of this graph. They have evolved to have anti-lock brakes, cruise control, stereos, cup holders, luggage for extended touring and a lot of bling. On the performance side of the equation, they have evolved to be incredibly fierce race machines that just happen to be street legal. Up in the hills, motorcycles are hyper-competent off-road machines with amazing amounts of horsepower and torque. And their price in North America and Europe reflects this.
My last motorcycle, a BMW F800ST, was able to go 0–60 in 3.5 seconds but was still comfortable enough for extended touring. It had an incredibly supple ride, cornered amazingly well, stuck to the road and braked on a dime. It was also a small bike at the time at 800 cc. At the time, it was hard to find a bike that wasn’t 1200 cc and well over 500 pounds or 230 kg. The motorcycles that most Europeans and North Americans have been buying are those top-end bikes. When people are buying a motorcycle, they are expecting something top of the line.
Recently, manufacturers have been trying to bring millennials into the fold with naked bikes, but with limited success. Naked bikes are cheap, with a price point under $5,000 USD. At that price point, it is difficult for manufacturers such as Harley Davidson and BMW to make money on as their businesses are optimized for prices in the $20k+ range.
Naked bikes have no fairings, simple seats, no luggage, etc. They have relatively small displacements of 500–650 cc which makes them well-suited for getting around town and short road trips. They have lower end components that make them suitable for two passenger riding only for short, occasional trips.
The naked bike market currently overlaps with the electric bicycle market and electric bicycles continue to evolve to greater and greater performance, with some offering the ability to switch off regulation mode for a little illicit fun. There are multiple vendors offering electric bikes capable of hitting 50 mph or 80 kph. That’s pretty fast for something that doesn’t require licenses or insurance, although these beasts are said to be intended for off road use, something the makers and buyers appear to be able to say with a straight face.
Electric bicycles, on the other hand, are currently following the bottom slanting line on the Innovator’s Dilemma graph. They have evolved to the equivalent utility of naked bikes about 80% of the time and they are far cheaper than naked bikes. When classified as an ebike, they typically having a lower purchase price and have no license or insurance requirements. They are restricted in speed by regulations in many geographies, but the restrictions still allow them to travel faster than the speed of bicycles and at or above the average speed of urban traffic.
That urban traffic speed is a very important point. The population globally has been shifting massively from rural to urban over the past 100 years and will only continue to do so. More and more millennials live in urban centers, don’t have cars and consider a 50 km distance to be a long way. Visiting people in the next town over and long motorcycle rides to the beach are a thing of the past for most people. Electric bikes are arguably more convenient in urban areas than motorcycles.
One thing electric bikes share with motorcycles but at a greater level is that gratifying acceleration. Electric torque can’t be beat, and when paired with an electric bike that weighs under 50 kg, it can be incredibly addictive, not to mention better than the motorcycle sitting next to you.
A few manufacturers are even putting out explicitly retro motorcycle-styled electric bikes which look like 1930s racers or vintage cruisers to give a cheap and virtuous aesthetic kick to them. They are blurring the line with motorcycle history intentionally. The Kosynier retro bicycle pictured has a top speed on non-public roads of 50 kpm | 30 mph, similar to motorcycles in the early 20th century that were raced in banked velodromes. It has a regulated mode limiting it to 25 kph for public roads, which I’m sure everyone will adhere to.
It’s much cheaper to innovate around a bicycle framework. Many manufacturers have already moved to fat tires for improved traction and comfort. Many have decent suspension based on the hyper-competent bicycle suspensions from downhill racing.They even have ABS now. There are two person electric bikes like those offered by Riese & Müller. Delfast has entered production with an electric bicycle with a range of 367 km (228 mi), very useful for people without charge points convenient to work or home. Ebikes obviously don’t need radiators, mufflers and many other components of traditional internal combustion motorcycles.
One of the limitations that electric motorcycle manufacturers have faced is a combination of rider’s expectations for top end components with the inability to get those components from OEMs due to low volumes. It has taken Zero Motorcycles years of track time and negotiations to get decent brakes and suspension on their bikes, with only the past couple of years’ models getting nods in reviews for those components. For electric bicycles, the rider expectation is much lower and the accessibility of relatively inexpensive but excellent components tuned from downhill racing and the like is much higher.
Electric bikes are rapidly evolving to meet 80% of the use cases of the bottom end of the motorcycle market. The trend is clear. The next generation of motorcycle manufacturers will be the current generation of electric bicycle manufacturers unless the majors get their houses in order. Zero will likely be around and possibly Energica, but electric bicycles will continue to improve as per Innovator’s Dilemma’s incredibly well-supported observations.