VanMoof says cost of living crisis ‘very good’ for ebike sales

Leading electric bike maker VanMoof is betting that the cost of living crisis will push more consumers to buy its products instead of cars, sounding a rare positive note as soaring inflation weighs on businesses globally.

Co-chief executive Ties Carlier said that the Dutch manufacturer was targeting more city commuters as high fuel costs and the continuing squeeze on consumers’ wallets force many to look for cheaper alternatives to cars and public transport.

Although VanMoof has had to pass some inflationary costs on to customers, the rising cost of living “is very good” for the company, Carlier told the Financial Times. 

“An ebike is the best alternative for [a car] in the city . . . It’s also, luckily, one of the most affordable solutions compared to a car, definitely, but even compared to public transport in London.” 

The start-up, whose bicycles range in price from £2,248 to £2,998, is counting on a further boost after coronavirus lockdowns drove a surge in demand for ebikes. VanMoof reported a tripling of sales in 2020, the most recent year for which it has provided numbers, helping its customer base reach 155,000 riders.

Carlier’s optimism is echoed by companies across the industry. Last year, the chief executive of Bosch eBike Systems, one of Europe’s biggest suppliers of ebike parts, told the FT that half of the pedal bicycles sold in the region will have a motor by 2025.

But VanMoof does not see conventional bikes as its main competition, Carlier said.

“Our competitors are the car brands,” he added. “[We now see customers] only use the car for essential things outside the city, but use the bike for the city trips. [Or] ditch the second car and get one or two electric bikes in its place . . . With cars, it’s not just fuel [that costs money], it’s the wear and tear, the parking.”

VanMoof had raised €179.2mn ($175.9mn) from investors as of last December, making it Europe’s most-funded ebike start-up, according to FT sister publication Sifted. Carlier said the company is targeting profitability by 2024.

But despite expecting to benefit overall from the rising cost of living, the manufacturer has faced headwinds from recent supply chain disruptions that have added to its own costs.

At one point, the price of semiconductors rose from 80 cents to as much as $30 per chip, Carlier said. Due to recent lockdowns in Chinese manufacturing hub Shenzhen, the first deliveries of VanMoof’s latest bike, the S5, have been delayed by three months, he added.

But Carlier said that VanMoof is mitigating the impact of disruptions to cross-border trade by largely concentrating its supply chain within Taiwan, where the chief executive is based.

Asked whether he was concerned about China’s increasing threats towards Taiwan, Carlier said he was “not so worried”.

“Because we assemble in Taiwan I think we are less vulnerable, because we [also get most of our parts] from Taiwan,” he said. “You are less vulnerable than if you would, say, assemble your bike in Turkey or Portugal . . . and you have to get your components from all over the world.”