The competitive landscape of motorcycle electrification
As the automotive industry moves to full-scale electrification, the trend toward electrification in the two-wheeled motorcycle industry is becoming clear. Not long ago, Honda, the world’s largest motorcycle manufacturer, announced that it will stop producing two-wheeled gasoline bikes and convert new bikes to pure electric (EV) motorcycles by the mid-2040s.
Honda says it will launch more than 10 all-electric motorcycles by 2025 and plans to sell 3.5 million all-electric motorcycles by 2030, accounting for about 15 percent of global sales. Honda currently sells 100,000-200,000 electric motorcycles annually, less than 1 percent of overall sales.
Table of Contents
American motorcycle brand Harley has successfully spun off its electric motorcycle division LiveWire and merged it with a special purpose acquisition company (SPAC) called AEA-Bridges Impact to become the first publicly traded electric motorcycle company in the United States.
In China, Cfmoto, an even younger publicly traded motorcycle company, also announced its “intelligent + electric” development strategy in September. According to the plan, Cfmoto will launch six fuel-powered two-wheelers and four electric two-wheelers in 2023, a ratio close to 50-50.
With sustainability becoming a mainstream global issue, the electrification of products is an important trend for the future development of the motorcycle market. In the midst of change, the high production cost of electric motorcycles, the immature supply chain and the new competitive landscape will become important issues that every motorcycle manufacturer needs to address.
New changes in the market
Speeds higher than 50km/h are electric motorcycles in the true sense of the word, and are also the new track of the current layout of the major global motorcycle OEMs. According to data, the global motorcycle market size has reached $124.387 billion in 2019, and the industry size has fallen back in 2020 and 2021 due to the epidemic but also both exceeded $100 billion.
In terms of sales volume, the global motorcycle sales volume in 2019 was 52,934,700 units, the highest value in recent years. 2020 onwards, affected by the COVID and other factors, the global motorcycle sales volume decreased significantly to about 47.19 million units; in 2021, due to the continuation of the COVID, the global motorcycle sales volume maintained a downward trend, with sales volume of about 44 million units.
For the Chinese market, total motorcycle sales in China in 2021 will be 20,194,800 units, including domestic and foreign sales. According to the power form, total sales of fuel motorcycles will be 16.252 million units in 2021, accounting for 80% of total motorcycle sales, while total sales of electric motorcycles will be 3.943 million units, accounting for 20%.
It is worth noting that the number one e-scooter seller in the Chinese market of nearly 4 million units is not a motorcycle OEM, but Yadea, whose main products are e-bikes and scooters. In the past year, Yadea sold 934,400 electric motorcycles, capturing 25% of China’s electric motorcycle market share. But compared to Yadea’s total sales of 13.86 million units in 2021, electric motorcycles account for less than 10 percent of sales.
Of the top 10 e-scooter brands in China, 80% are also e-bike manufacturers, and the market share of traditional motorcycle manufacturers is almost negligible. If we look at Yadea’s average unit price of 1992 RMB, the market for mid- to high-end electric motorcycles in China can be said to be a blank.
So, in this market situation, coupled with the global energy restructuring, traditional fuel motorcycle manufacturers began to turn. One of the most significant weathervane is the decision by Honda, the world’s largest motorcycle manufacturer, to go fully electric. According to Honda’s plan, by 2026, the company’s electric motorcycle sales will increase to 1 million units, and Honda will expand sales in India, Southeast Asia and China at the same time.
Yamaha Engine, a Japanese company with similar plans to Honda, has proposed a plan to reach 90% of electric motorcycles by 2050. A research company’s director of planning and research pointed out that the environmental regulations for motorcycles in various countries are getting stricter every year. The cost of responding to the regulations is high, and the transition to electric motorcycles is urgent.
Similar to new energy vehicles, traditional fuel motorcycles will become a whole new track after electrification, which will also lower the driving threshold of motorcycles significantly. According to a motorcycle enthusiast, electric motorcycles can largely reduce the problem of exhaust noise nuisance compared to fuel vehicles. At the same time, the electric motor power characteristics make the motorcycle’s torque increase, speed and driving performance is further improved.
The key point is that, for motorcycle beginners, the elimination of the throttle clutch will make it easier to shift gears, which is equivalent to turning a car from manual to automatic. In addition, electrification brings more possibilities of intelligent applications for motorcycles, such as nfc key unlocking, more intelligent car machines, including future applications of autonomous driving technology, etc.
For example, Honda has also revealed plans to launch “connected” motorcycles that can navigate charging stations and routes after 2024. Cfmoto, on the other hand, launched in July a customized motorcycle system for electric motorcycles that can be adapted to iOS and Android, with in-car navigation and custom maps, and added ACC automatic cruise control to its electric motorcycle products. According to the report, the global electric motorcycle market is expected to reach 69.3 billion RMB in 2026, with a compound annual growth rate (CAGR) of 6.5%.
The battery cost problem to be solved
Although Honda and other mainstream motorcycle manufacturers believe that electrification is a definite future, the high production cost is a major problem for all motorcycle OEMs and a major obstacle to the transformation of electric motorcycles from a fun product to a mass commuter product.
An electric motorcycle with the same performance on the market now will cost 2-3 times more than a fuel motorcycle. From an industry perspective, it will take about 3-5 years for the manufacturing cost of electric motorcycles to equalize with that of fuel motorcycles. The core reason for the high cost of electric motorcycle manufacturing is the rising cost of batteries.
Public data shows that since 2021, the price of core raw materials for power batteries has risen sharply, with lithium prices having increased from 50,000 yuan/ton in early 2021 to the current 500,000 RMB/ton, a tenfold increase in just over a year’s time.
In addition, according to the data, the average spot price of battery-grade lithium carbonate rose 0.25 million RMB/ ton to 51.75 million RMB/ ton that day. Since 2022, the cumulative price increase of lithium carbonate has been more than 80%. And the control of the rise and fall of battery costs is not in the motorcycle industry, but in the automotive industry.
In 2021, China’s new energy vehicle sales reached 3.521 million units, up 1.6 times year-on-year, with penetration rising to 13.4 percent. 2022, new energy vehicle sales continue to skyrocket. Data show that in the first seven months of this year, China’s new energy vehicle sales reached 3.194 million units, up 1.2 times year-on-year, and the penetration rate rose to 22.1 percent.
As the penetration rate of new energy vehicles continues to increase, the cost of power batteries will also be difficult to reduce in the near term. As a result, the overall cost of electric motorcycles will also continue to be affected, making it difficult to narrow the cost gap with fuel motorcycles.
Based on this, the selling price gap between electric motorcycles and fuel motorcycles is large, resulting in the current electric motorcycle’s mainly existing as a fun product rather than a commuting product.
However, some argue that the current price of lithium-ion is significantly inflated. If the time dimension is stretched, as the cost of batteries decreases, electric motorcycles will eventually return to their commuting attributes.
China’s motorcycle facing the problem
The electrification of motorcycles is roughly the same path as the electrification of the automobile industry. After leaving behind engines and transmissions, Chinese automakers have quickly become the most successful sample of the global automotive industry’s transition to new energy. However, in the process of motorcycle electrification, the transformation of Chinese manufacturers is not as radical as that of the companies from other countries.
BMW Motorcycles started its electric footprint as early as 2011 with the launch of the concept bike Concepte, which kicked off product planning and development for the electric vehicle segment. BMW’s new electric motorcycle, the BMW CE 04, is its latest response to market demand.
Honda is planning to use “all-solid-state batteries” for two-wheelers, which have the advantage of shortening charging time. In India, Honda will launch biofuel-enabled models, including hybrids, after 2023.
In India, another big market for motorcycles, the government has reportedly introduced policies to support the popularity of electric vehicles, and local manufacturers have made investments. Hero Electric is building a second plant in India that will increase annual production capacity to 1 million units over the next three years.
Compared with BMW and Honda, which have set a clear timeline for the transition to electrification, Chinese motorcycle manufacturers, except for Cfmoto, have not clearly indicated their intention to fully transform to electrification.
However, mid- to high-end electric motorcycles are a whole new supply chain, such as the 400v high-voltage platform that high-performance electric motorcycles need to be equipped with, something that no one has done in the motorcycle industry. Some Chinese manufacturers such as Zongshen and Loncin tried to lay out the electric motorcycle sector a long time ago. For example, in 2018 Loncin launched its first electric motorcycle product in conjunction with Sur-ron.
However, compared with fuel motorcycles, traditional manufacturers launched electric motorcycles with no obvious advantages in terms of product power – higher selling price and lower performance. As a result, the electrification of motorcycles in China has never found a clear path. However, for the Chinese electric motorcycle market, many startups are emerging and trying to change the existing situation when traditional manufacturers are not motivated enough to transform.
Horwin previously sold electric motorcycle products mainly in the European market, with cumulative sales of more than 30,000 units, annual revenue exceeding 100 million RMB, and entering the top three in the sales ranking in the European market. 2022, Horwin’s founding team decided to enter the Chinese market and launched the motorcycle industry’s first integrated intelligent chassis platform in July this year.
According to Horwin’s CEO, traditional two-wheeled electric motorcycles are generally 70 to 100 meters long, requiring at least 40-50 workers to connect the motor, electric control, and battery through various wire harnesses. However, after integrating the battery, motor, and electric control system into one platform, the basic architecture of electric motorcycles will be completely changed. Compared with electric motorcycles currently on the market, Horwin’s parts will be reduced by at least one-third.
In addition to Horwin, many startups have emerged in China this year, including Blueshark and NEON, which are focused on the electric motorcycle circuit. Among them, Blueshark has also completed a $10 million Series A round of funding. Overall, electric motorcycles are still in the early stages of development, but their future is becoming increasingly clear.
The competitive landscape of motorcycle electrification
Table of Contents
American motorcycle brand Harley has successfully spun off its electric motorcycle division LiveWire and merged it with a special purpose acquisition company (SPAC) called AEA-Bridges Impact to become the first publicly traded electric motorcycle company in the United States.
In China, Cfmoto, an even younger publicly traded motorcycle company, also announced its “intelligent + electric” development strategy in September. According to the plan, Cfmoto will launch six fuel-powered two-wheelers and four electric two-wheelers in 2023, a ratio close to 50-50.
With sustainability becoming a mainstream global issue, the electrification of products is an important trend for the future development of the motorcycle market. In the midst of change, the high production cost of electric motorcycles, the immature supply chain and the new competitive landscape will become important issues that every motorcycle manufacturer needs to address.
New changes in the market
Speeds higher than 50km/h are electric motorcycles in the true sense of the word, and are also the new track of the current layout of the major global motorcycle OEMs. According to data, the global motorcycle market size has reached $124.387 billion in 2019, and the industry size has fallen back in 2020 and 2021 due to the epidemic but also both exceeded $100 billion.
In terms of sales volume, the global motorcycle sales volume in 2019 was 52,934,700 units, the highest value in recent years. 2020 onwards, affected by the COVID and other factors, the global motorcycle sales volume decreased significantly to about 47.19 million units; in 2021, due to the continuation of the COVID, the global motorcycle sales volume maintained a downward trend, with sales volume of about 44 million units.
For the Chinese market, total motorcycle sales in China in 2021 will be 20,194,800 units, including domestic and foreign sales. According to the power form, total sales of fuel motorcycles will be 16.252 million units in 2021, accounting for 80% of total motorcycle sales, while total sales of electric motorcycles will be 3.943 million units, accounting for 20%.
It is worth noting that the number one e-scooter seller in the Chinese market of nearly 4 million units is not a motorcycle OEM, but Yadea, whose main products are e-bikes and scooters. In the past year, Yadea sold 934,400 electric motorcycles, capturing 25% of China’s electric motorcycle market share. But compared to Yadea’s total sales of 13.86 million units in 2021, electric motorcycles account for less than 10 percent of sales.
Of the top 10 e-scooter brands in China, 80% are also e-bike manufacturers, and the market share of traditional motorcycle manufacturers is almost negligible. If we look at Yadea’s average unit price of 1992 RMB, the market for mid- to high-end electric motorcycles in China can be said to be a blank.
So, in this market situation, coupled with the global energy restructuring, traditional fuel motorcycle manufacturers began to turn. One of the most significant weathervane is the decision by Honda, the world’s largest motorcycle manufacturer, to go fully electric. According to Honda’s plan, by 2026, the company’s electric motorcycle sales will increase to 1 million units, and Honda will expand sales in India, Southeast Asia and China at the same time.
Yamaha Engine, a Japanese company with similar plans to Honda, has proposed a plan to reach 90% of electric motorcycles by 2050. A research company’s director of planning and research pointed out that the environmental regulations for motorcycles in various countries are getting stricter every year. The cost of responding to the regulations is high, and the transition to electric motorcycles is urgent.
Similar to new energy vehicles, traditional fuel motorcycles will become a whole new track after electrification, which will also lower the driving threshold of motorcycles significantly. According to a motorcycle enthusiast, electric motorcycles can largely reduce the problem of exhaust noise nuisance compared to fuel vehicles. At the same time, the electric motor power characteristics make the motorcycle’s torque increase, speed and driving performance is further improved.
The key point is that, for motorcycle beginners, the elimination of the throttle clutch will make it easier to shift gears, which is equivalent to turning a car from manual to automatic. In addition, electrification brings more possibilities of intelligent applications for motorcycles, such as nfc key unlocking, more intelligent car machines, including future applications of autonomous driving technology, etc.
For example, Honda has also revealed plans to launch “connected” motorcycles that can navigate charging stations and routes after 2024. Cfmoto, on the other hand, launched in July a customized motorcycle system for electric motorcycles that can be adapted to iOS and Android, with in-car navigation and custom maps, and added ACC automatic cruise control to its electric motorcycle products.
According to the report, the global electric motorcycle market is expected to reach 69.3 billion RMB in 2026, with a compound annual growth rate (CAGR) of 6.5%.
The battery cost problem to be solved
Although Honda and other mainstream motorcycle manufacturers believe that electrification is a definite future, the high production cost is a major problem for all motorcycle OEMs and a major obstacle to the transformation of electric motorcycles from a fun product to a mass commuter product.
An electric motorcycle with the same performance on the market now will cost 2-3 times more than a fuel motorcycle. From an industry perspective, it will take about 3-5 years for the manufacturing cost of electric motorcycles to equalize with that of fuel motorcycles. The core reason for the high cost of electric motorcycle manufacturing is the rising cost of batteries.
Public data shows that since 2021, the price of core raw materials for power batteries has risen sharply, with lithium prices having increased from 50,000 yuan/ton in early 2021 to the current 500,000 RMB/ton, a tenfold increase in just over a year’s time.
In addition, according to the data, the average spot price of battery-grade lithium carbonate rose 0.25 million RMB/ ton to 51.75 million RMB/ ton that day. Since 2022, the cumulative price increase of lithium carbonate has been more than 80%. And the control of the rise and fall of battery costs is not in the motorcycle industry, but in the automotive industry.
In 2021, China’s new energy vehicle sales reached 3.521 million units, up 1.6 times year-on-year, with penetration rising to 13.4 percent. 2022, new energy vehicle sales continue to skyrocket. Data show that in the first seven months of this year, China’s new energy vehicle sales reached 3.194 million units, up 1.2 times year-on-year, and the penetration rate rose to 22.1 percent.
As the penetration rate of new energy vehicles continues to increase, the cost of power batteries will also be difficult to reduce in the near term. As a result, the overall cost of electric motorcycles will also continue to be affected, making it difficult to narrow the cost gap with fuel motorcycles.
Based on this, the selling price gap between electric motorcycles and fuel motorcycles is large, resulting in the current electric motorcycle’s mainly existing as a fun product rather than a commuting product.
However, some argue that the current price of lithium-ion is significantly inflated. If the time dimension is stretched, as the cost of batteries decreases, electric motorcycles will eventually return to their commuting attributes.
China’s motorcycle facing the problem
The electrification of motorcycles is roughly the same path as the electrification of the automobile industry. After leaving behind engines and transmissions, Chinese automakers have quickly become the most successful sample of the global automotive industry’s transition to new energy. However, in the process of motorcycle electrification, the transformation of Chinese manufacturers is not as radical as that of the companies from other countries.
BMW Motorcycles started its electric footprint as early as 2011 with the launch of the concept bike Concepte, which kicked off product planning and development for the electric vehicle segment. BMW’s new electric motorcycle, the BMW CE 04, is its latest response to market demand.
Honda is planning to use “all-solid-state batteries” for two-wheelers, which have the advantage of shortening charging time. In India, Honda will launch biofuel-enabled models, including hybrids, after 2023.
In India, another big market for motorcycles, the government has reportedly introduced policies to support the popularity of electric vehicles, and local manufacturers have made investments. Hero Electric is building a second plant in India that will increase annual production capacity to 1 million units over the next three years.
Compared with BMW and Honda, which have set a clear timeline for the transition to electrification, Chinese motorcycle manufacturers, except for Cfmoto, have not clearly indicated their intention to fully transform to electrification.
However, mid- to high-end electric motorcycles are a whole new supply chain, such as the 400v high-voltage platform that high-performance electric motorcycles need to be equipped with, something that no one has done in the motorcycle industry.
Some Chinese manufacturers such as Zongshen and Loncin tried to lay out the electric motorcycle sector a long time ago. For example, in 2018 Loncin launched its first electric motorcycle product in conjunction with Sur-ron.
However, compared with fuel motorcycles, traditional manufacturers launched electric motorcycles with no obvious advantages in terms of product power – higher selling price and lower performance. As a result, the electrification of motorcycles in China has never found a clear path. However, for the Chinese electric motorcycle market, many startups are emerging and trying to change the existing situation when traditional manufacturers are not motivated enough to transform.
Horwin previously sold electric motorcycle products mainly in the European market, with cumulative sales of more than 30,000 units, annual revenue exceeding 100 million RMB, and entering the top three in the sales ranking in the European market. 2022, Horwin’s founding team decided to enter the Chinese market and launched the motorcycle industry’s first integrated intelligent chassis platform in July this year.
According to Horwin’s CEO, traditional two-wheeled electric motorcycles are generally 70 to 100 meters long, requiring at least 40-50 workers to connect the motor, electric control, and battery through various wire harnesses. However, after integrating the battery, motor, and electric control system into one platform, the basic architecture of electric motorcycles will be completely changed. Compared with electric motorcycles currently on the market, Horwin’s parts will be reduced by at least one-third.
In addition to Horwin, many startups have emerged in China this year, including Blueshark and NEON, which are focused on the electric motorcycle circuit. Among them, Blueshark has also completed a $10 million Series A round of funding. Overall, electric motorcycles are still in the early stages of development, but their future is becoming increasingly clear.