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Is Rad Power the $329-million gorilla of the e-bike world?

Published October 28, 2021

On Thursday Rad Power announced that with its latest $154 million financing round, it has brought in a total of $329 million in investments since its inception. The company claims that makes it the world's best-funded e-bike brand, at least in the direct-to-consumer market. While strictly speaking that's likely true, there are some other mega players in the e-bike space with the power to further disrupt the market for regular and electric bikes if they choose.

In making this funding claim, Rad Power's closest competitor in the D2C space would likely be Holland's VanMoof, which has brought in a total of $182 million in investments. Rad Power also is generally acknowledged as the largest seller of e-bikes, by unit volume, in the U.S. It's less clear whether Rad Power specifically, and the D2C channel more generally, is making the most revenue from e-bikes. With a much higher average selling price, the specialty channel remains a major part of the e-bike market, and brick-and-mortar specialty retailers continue to serve a critical role in the market, as Rick Vosper described in a column earlier this year. 

But there are participants in the e-bike industry and around it that already wield considerable power, and could have even more potentially — more than Rad Power and more than some of the largest companies currently in the bike industry.

Within this industry, Shimano (annual revenue about $4 billion) and Giant Group (annual revenue about $3 billion) are each investing heavily in e-bikes, with the electric-assist machines accounting for about a third of Giant's revenues this year.

Pon Bike Holdings, after it completes its planned $810 million acquisition of Dorel Sports, will have annual revenues of about $3 billion in the bike market, and owns major e-bike brands including Gazelle and Charge. Pon's Dutch rival, Accell Group, is on track for 2021 revenues of about $1.6 billion; in the first half of 2021, e-bikes accounted for about 53% of Accell's business. 

India's Hero Cycles (part of Hero Motor Company, which has $4.2 billion in annual revenue), said to be the world's largest volume bike maker, also is very active in e-bikes and electric motorcycles, and has been developing strategies for U.S. sales for years.

Chinese e-bike motor maker Bafang Electric raised $189 million on the stock market in 2019. 

Even those companies' size put Rad Power's $329 million in funding in perspective.

But some much more massive corporations that do most of their business outside the bike market are active in, or at least exploring, the e-bike market. Companies like Bosch (estimated annual revenues: $71 billion), Yamaha ($14 billion), Panasonic ($73 billion), and Harley-Davidson ($5.5 billion). Any of them have the ability to spend years and millions of dollars developing market-changing technologies, supply chains, distribution and marketing strategies that few if any traditional bike companies can contemplate.

And don't forget Ford ($127 billion), GM ($122 billion), and Volkswagen ($222 billion). Or Tesla ($31 billion). These and the other major automakers are investing billions upon billions into electric vehicle technology and many have at least shown e-bike concepts, if not actually marketed them. Volkswagen for example, launched an e-cargo bike in 2019. Ford has explored e-bike share programs and other e-mobility concepts, while GM spent untold millions developing an e-bike line before backing out of that project as the pandemic upset its business last year.

My point is not to minimize Rad Power's influence. If it invests its latest cash infusion into U.S. and European production and in brick-and-mortar and mobile retail, as it is promising, it will become even more powerful in the market than it is currently. The point is that in a market segment where technology and retail distribution strategies are critical, there are many interested players with pockets deep enough to change things quickly and profoundly if they choose.

BRAIN's readers in the specialty channel can take some comfort in knowing that as the e-bike market grows, the part of the e-bike pie that specialty retail serves will likely grow proportionately. But it's also likely that a more mature e-bike market will be dominated by companies that dwarf our industry's current heavyweights.

Other recent e-bike investments of note:

We may never know how much GM spent developing its e-bike.