Has the electric bike’s future finally arrived? (09/02/2008)

02

Sep

Has the electric bike’s future finally arrived? (09/02/2008)

In 2000, Gary Coffrin thought he heard opportunity knock. A major electric utility, American Electric Power, was scrapping a multimillion-dollar effort to sell electric-powered vehicles as the future of transportation. Sitting on the clearance rack: fleets of electric bicycles, sleek two-wheelers sporting battery packs.Coffrin, who had worked in the bike industry for decades, bought several hundred at liquidation prices and started a Silicon Valley company, Electric Wheels International, to deal them to retailers. He signed a deal with a major Taiwanese bike builder, hoping the electric bike’s time had arrived.

But when the tech bubble burst, Coffrin’s venture came crashing down. His funders’ equities lost 40 percent of their value in just 12 months. Meanwhile, EWI had an entire warehouse of bikes with batteries charging around the clock to preserve their quality. To cut their losses, EWI’s backers pulled the plug.

Coffrin’s experience tracked with a number of other botched campaigns to introduce the electric bike to the American public. The most high-profile of these was an effort by Lee Iacocca, the longtime Chrysler chairman, to market the electric bike as part of a futuristic legion of electric vehicles.

In each case, the cause of death was the same: No one knew what an electric bike was, and the sellers couldn’t get the word out in time to justify staying in business. Instead of catching fire, electric-bike sales leveled off, according to the Gluskin-Townley Group, which does market research for the National Bicycle Dealers Association.

Can aging baby boomers get it up the hill?

Now a two-year uptick in electric bike sales has some analysts wondering if the little-known technology is finally ready to hit the road. After half a decade of stagnant sales, the numbers doubled to 6,000 electric bikes in 2006, followed by another 10,000 in 2007.

But among the small community of electric bike producers and analysts, opinions differ as to whether they should be breaking out the bubbly for a near zero-emissions technology that could easily replace short auto trips, or if the bikes will never be more than a high-end gadget for outdoor adventurers.

Larry Pizzi, the president of electric-bike developer Currie Technologies, said climbing gas prices had his firm scrambling to fill orders. In California, where Currie is based, gas prices hit $5 a gallon last spring. Pizzi saw that as a watershed event. While his electric-bike sales used to show “significant ebbs and flows,” now, he says, “they’re growing very rapidly in popularity.”

Jay Townley, a partner at Gluskin-Townley Group, is not so sure gas prices deserve the credit. A mid-range electric bike, he said, costs between $800 and $1,000 — not a high price for a biking enthusiast, but well out of reach for lower-income families. “No, I don’t think high gas prices [are] going to drive electric bikes, because they are not a substitute for a car, and you’ve got to get out there and ride a bicycle,” he said.

However, Townley’s group thinks aging baby boomers could be the force that sends demand upward. “These are the guys and gals who may not have been on a bike for 30 years,” said Elliott Gluskin, Townley’s partner. The bike “gives the participants confidence knowing he or she can get up the hill without stressing too much, but it also gives the participant the ability to actively travel.”

Electric bikes fall into two major categories: throttle and pedal assist. With the first kind, a rider can choose how much power she wishes her electric engine to generate, topping out at about 30 miles per hour. With the second, more sophisticated variety, when the rider encounters a hill, the electric motor “assists” by helping move the pedals.

Coffrin, whose Silicon Valley bike venture crashed eight years ago, remains skeptical that Americans will suddenly fall in love with the electric two-wheelers. Unlike China and Europe, where many people use bikes for commuting and day-to-day getting around, the United States has historically treated bikes as recreational toys, he said.

Like the cartoon character Charlie Brown and the proverbial football, Coffrin and other players in this saga thought people would get a kick out of this bike long before now. Townley was a U.S.-based consultant with Yamaha in the mid-1990s, when it developed the first pedal-assist system. Yamaha’s efforts to make headway in the United States never got off the ground, and by 1996 the company had decided to shift its focus to Europe and Asia.

Iacocca’s short, ill-fated ride

It was around this time that Iacocca, the automotive mogul, thought he could draw the venture capital and sales channels that could break electric vehicles — including bikes — into the popular sphere. At a 1997 electric-vehicle conference in Orlando, Townley recalled, Iacocca rolled out an electric bike.

While its design was flashy and aggressive, the bike was far too heavy for a middle-aged person to lift from his car or up the stairs to an apartment. “It was aimed 55-year-olds but designed for a 24-year-old,” Townley said. It also took eight to nine hours to charge. Iacocca’s firm, EV Global, has since ceased to produce them.

Sales of electric bikes hovered between 3,000 and 5,000 until 2005, according to Gluskin-Townley’s estimates. Now, something is driving new interest — and companies that had given up in the Iacocca era are trying their luck in the United States once more. Improvements in the capacity and cheapness of batteries and enthusiasm over electric cars may be part of the new movement.

Even Coffrin, the skeptic, now calls the electric bike’s arrival “inevitable.” But, he jokes, he’s missed the mark before. “In 2000, I thought a practical fuel cell couldn’t be more than five years away,” he said. “I guess this is 2008, and I was wrong there.”