According to McKinsey’s 2023 Global Mobility Report, the sale of electric bikes is expected to increase at a 12.3% compound annual growth rate in 2025, and the market size will be more than 50 billion US dollars. One of the most basic push factors that fuel this growth is the huge energy saving benefit: The typical electric bicycle consumes merely 1.2 kilowatt-hours of electricity to go 100 kilometers at a cost of around $0.5, or 83.3% lower than fuelled motorbikes with a consumption rate of 2.5 liters per 100 kilometers and costing around $3. On the basis of 5,000 kilometers average annually of commuter cycling, shoppers can save $625 within 5 years, while the payback period of investment is shortened to 2.8 years.
In terms of policy support, the “Green Transport Subsidy Act” signed by the European Union in 2024 clearly offers electric bicycle consumers a 15% tax refund of vehicle expenditure. Combined with subsidies on local government charging piles, the purchase cost of the car can be discounted 20%-25% for consumers. Let’s consider the German market case. For a model at a cost of 2,500 euros, the actual amount paid by consumers can be reduced to 1,875 euros. Meanwhile, data from China’s Ministry of Industry and Information Technology show that domestic capability for manufacturing lithium batteries will be 1,200 gigawatt-hours by 2025, pushing the price of electric bike battery packs to $80 a kilowatt-hour, down 47% from 2020 levels, reducing the cost of making the entire vehicle even lower.
Technology innovation also helps to support the future value of electric Bikes. Panasonic will introduce the 21700 next-generation lithium battery cell in 2024 that will increase the energy density to 300 watt-hours per kilogram, an 18% increase from the current generation, and support a vehicle range of more than 150 kilometers. In conjunction with the intelligent energy recovery system, the efficiency of energy conversion of kinetic energy to electric energy during braking can be increased to 35%, battery life can be up to 8 years or 2,000 charge-discharge cycles. The “Dynamic Torque Distribution System” that Garmin developed in collaboration with Bosch is able to modify the output of motor power in real time according to road conditions as well. Even on inclined mountains with an incline of 15%, the vehicle can still drive upwards at a speed of 25 kilometers per hour, 40% quicker than previous models.
Environment gain analysis-wise, the World Resources Institute estimates that if 10% of the globe’s fuel-powered commuters switch to using electric bikes, 120 million tons of annual carbon dioxide emissions can be avoided, equaling the forest carbon sink capacity of 24 million hectares. At the micro level, Transport for London’s evidence of users who travel by electric bike measures that commuting time is cut by 22% on average, and the psychological stress index from congestion avoidance is lowered by 37%. Within the sharing economy sector, the pilot data of Uber Eats in 2024 shows that after using electric Bikes by delivery personnel, per-day average number of orders increased by 15%, while the maintenance cost of the vehicle decreased by 28%, and the overall operating profit margin of the platform increased by 5.3 percentage points.
Although the obstruction of a relatively expensive initial purchase cost (about 3 to 5 times as much as traditional bicycles), along with the overall life cycle cost, policy encouragement and technological update trend, the return on investment (ROI) of an electric bicycle would reach 19.8% in 2025, which will be higher than the 15.6% average of the personal transport equipment industry. The Boston Consulting Group model suggests that if the average number of daily uses of a vehicle is more than 1.5 times, the user’s overall revenue in three years will be able to repay the original investment and yield a net surplus. Thus, based on the consumption habits of high-frequency and medium to short-distance travelling needs of consumers, electric bike remains a rational choice that is affordable and sustainable in 2025.