Leading e-bike maker VanMoof is betting the cost of living crisis will drive more consumers to buy its products instead of cars, setting a rare positive note as soaring inflation weighs on businesses in the world.
Co-chief executive Ties Carlier said the Dutch automaker is targeting city commuters more as high fuel costs and continued pressure on consumers’ wallets are forcing many to look for cheaper alternatives to cars and public transport. .
Although VanMoof has had to pass on some inflationary costs to its customers, the rising cost of living “is very good” for the company, Carlier told the Financial Times.
“An electric bike is the best alternative for [a car] in the city . . . It is also, fortunately, one of the most affordable solutions compared to the car, certainly, but even compared to public transport in London.
The start-up, whose bikes range in price from £2,248 to £2,998, is counting on further momentum after coronavirus lockdowns led to a surge in demand for e-bikes. VanMoof reported a tripling of sales in 2020, the most recent year for which it provided figures, helping its customer base to reach 155,000 passengers.
Carlier’s optimism is shared by companies in the industry. Last year, the managing director of Bosch eBike Systems, one of Europe’s largest e-bike parts suppliers, told the FT that half of all pedal bikes sold in the region will have a motor by 2025.
But VanMoof doesn’t see conventional bikes as its main competition, Carlier said.
“Our competitors are car brands,” he added. “[We now see customers] only use the car for essential things outside the city, but use the bike for trips around town. [Or] Ditch the second car and place an e-bike or two in its place. . . With cars, it’s not just fuel [that costs money]it’s wear and tear, parking.
VanMoof had raised 179.2 million euros ($175.9 million) from investors last December, making it Europe’s most-funded e-bike start-up, according to sister publication FT , Sifted. Carlier said the company aims for profitability by 2024.
But while it expects to benefit overall from the rising cost of living, the manufacturer has faced headwinds from recent supply chain disruptions that have increased its own costs.
At one point, the price of semiconductors jumped from 80 cents to $30 per chip, Carlier said. Due to the recent closures of the Chinese manufacturing center in Shenzhen, first deliveries of VanMoof’s latest bike, the S5, have been delayed by three months, he added.
But Carlier said VanMoof is mitigating the impact of cross-border trade disruptions by largely focusing its supply chain in Taiwan, where the chief executive is based.
When asked if he was concerned about China’s growing threats to Taiwan, Carlier said he was “not that worried”.
“Because we are meeting in Taiwan, I think we are less vulnerable, because we [also get most of our parts] of Taiwan,” he said. “You are less vulnerable than if you were, for example, assembling your bike in Turkey or Portugal. . . and you have to source your components from anywhere in the world.