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September 03, 2012

History and Future of Electric Bikes in China

China Dialogue - Unlike other export-oriented industries, China consumes 80% of its own production of electric bikes. China has over 150 million electric bikes on the road, while Europe, with 18 million units, comes a distant second. India, with less than 500,000 vehicles produced, is low down on the list.

In 2010, the world produced 60 million motorbikes that ran on fossil fuel and 32 million electric and hybrid two-wheelers. With a near average yearly growth of 20%, electric-powered units will close the gap by 2015, with both categories expected to be producing 70 million units individually by that time.

China expects to produce 75 million units per year by 2020, with 500 million electric bikes on road. This will mean that a third of China’s population will be empowered with personal transport and will not need state-funded subsidized mass transport.

The world’s five largest motorcycle markets are China, India, Indonesia, Brazil and Vietnam, which together have three billion people in need of low-cost, eco-friendly vehicles for daily commutes. Other emerging economies will soon latch on to the China growth story. Also, it is only a matter of time before solar batteries replace lead-acid, lanthanum and lithium ion ones. “In China, electric bicycles have a moderating influence on the use of cars,” advocacy group The Clean Air Initiative for Asian Cities told The New York Times. As a result, there are five times more electric bikes on China’s roads than cars.

Most of these are low-powered units of 200 watts, fitted with reusable lead acid batteries. They typically cost 2,400 yuan (less than US$400), the average monthly pay of a Chinese worker. They are no-frills utility vehicles chugging steadily at 20 kilometers an hour. The workforce typically travels 50 kilometers a day on single charge, usually from home to workplace, and is said to save 150 million worker hours each day. By contrast, the US motorbike market is 82% for recreation with low average bike runs of 1,000 miles per year, against 12,000 miles per year driven by the American car user.


Estimate of Electric bikes in China
2012  150 million
2013  185 million
2014  220 million
2015  265 million
2016  310 million
2017  360 million
2018  410 million
2019  465 million
2020  520 million

In 1986, among the seven technology sector plans identified by physicist Wang Ganchang and his team of engineers, and endorsed by Deng Xiaoping, was the energy plan that included the 863 Electric Drive Fuel Cell Vehicle Project.

The electric bike would give China several key advantages. One, it would provide freedom from imported technology or resources. Two, it would be a measured scale-up of the bicycle that was already in use by the factory and farm workers. Three, China could obviate huge investments in mass-transport systems that depend on subsidies to remain operational. And last, but not least, the electric two-wheeler solution was cheap, efficient and sustainable.

China introduced several policy initiatives. During the 1980s and 1990s, it started using its pool of surplus labor to build cycle lanes parallel to roads throughout its cities. Today, all cities, even tier four and tier six towns with only one million people, have segregated bicycle tracks.

At the turn of the century, as China became more prosperous, it invested 800 million yuan (US$127 million) in the 863 fuel cell project. It created several common services facilities that small entrepreneurs could use to access technology and finance. As the component and accessory plants developed, so did the assemblers retrofitting traditional bikes with motors powered by lead acid-batteries. Intensive development of the battery industry, lead acid and lithium ion, also started. Over the next decade, a slew of subsidies and policy measures – subsidised land and monetary grants – propped up the industry. Consumers got cash incentives.

The subsidy was hiked repeatedly when new and powerful models were introduced and was upgraded last year to a maximum of 3,000 yuan (US$475) for a 1,000-watt two-wheeler costing up to 10,000 yuan (US$1,600). There was no need for registration of the electric two-wheelers and no licence requirement for the buyers. This made it popular and user-friendly for students, women and the aged because it was a low-cost, low-speed but power-assisted vehicle. The big boost to the industry came, however, when several cities started to ban conventional motorbikes. Though criticised as an extreme step, it ensured that every manufacturer moved into the production of electric vehicles in China.

In 2007, it introduced two-wheelers powered by lithium ion batteries that gave a higher speed as well as longer life. A new product category of electric scooters rapidly became popular that catered to the more sophisticated user by offering a higher speed of 50 kilometres-per-hour and longer charge life of 80 to 100 kilometres. As speeds rose, so did the number of accidents. Some municipalities like Shenzhen have responded by banning electric bikes for six months with the intent to introduce registration and licensing for higher-powered models.

Meanwhile, the advent of high-speed units and a hybrid version powered by lithium and lanthanum batteries have also spurred the interest of global majors. Yamaha, Honda, Suzuki, Peugeot, BMW and Volkswagen are all readying new models that will hit the market this year. At Delhi's Auto Expo 2012, Indian manufacturers Hero Electricals, Lohia Auto and TVS Motor also displayed both electric-driven as well as hybrid versions.


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