Oil prices continue to be a significant factor in the growth of Australia's ebike market
At the end of September, petrol prices in the Australian city of Brisbane hit a record high and remain well above $2 per litre nationwide. The high price of petrol makes travelling by car an expensive burden, as well as the need to pay high car insurance and maintenance costs. The increased cost of travelling has become a restrictive barrier to the use of cars, and many Australians are beginning to look for new ways to travel instead of the car, and e-bikes have become a new choice for many Australians, as opposed to cars, which are cheaper and more convenient.
A Market Choice with Many Options
A study by the Australian Automobile Association found that in 2022, transport costs for households in Australia's capital cities will increase by 8.8 per cent, and in remote areas by 10.1 per cent, far outstripping the overall inflation rate of 6 per cent, with rising transport costs leading to a decline in car use. One commuter from Australia, Francesca, said she now uses an e-bike for most of her daily commute, and uses the services of car-sharing companies in addition to her own car, and subscribes to a $59-a-week e-bike subscription from rental company Lug+Carrie.
Electric vehicles have been largely unaffected by the soaring cost of petrol and sales have increased dramatically compared to the same period last year, with pure electric vehicle (EV) sales in Australia more than tripling in the first nine months of 2023, but with high barriers to entry, a base price for an EV starting at $40,000 and a fledgling second-hand market, relatively affordable e-bikes have emerged as a low-cost alternative to fuel-guzzling cars. A low-cost alternative to fuel-guzzling cars, e-bikes have become a relatively affordable alternative to fuel-guzzling cars, and rental companies have emerged as e-bike use grows, offering a lower-cost option for short-term users.
Continued Growth of the E-Bike Market
Since 2017, the Australian e-bike market has grown steadily as states and cities have passed uniform laws on the use of e-bikes, with sales roughly quintupling by 2022 to more than 100,000 e-bikes by 2022, with particularly significant growth in the household and freight markets, where demand for models with child seats has increased following the abandonment of the car for travelling. E-bike sales continue to grow as demand for models with child seats increases following the abandonment of car travel.
In Australia, an e-bike can cost around $2,000 for an entry-level model, $5,000 for a cargo model that can be used for family travel, and up to $20,000 for a premium model, with some high-end models being more expensive, but not only are they cheaper to buy than cars, they are also fairly inexpensive to use, with bikes on average costing around 15 cents to recharge, and there are no parking fees, and they are not as expensive as cars. The average cost of charging a bicycle is about 15 cents, there are no parking fees, and the cost of operating a bicycle is lower than a car or public transport.
Nonetheless, cars are still the best choice for long-distance travel, and e-bikes are most popular in the suburbs between 5km and 15km from the CBD, making them one of the main modes of diversified travel. In addition to economic considerations, leisure and exercise are the main reasons why people start cycling, and the sport and fitness attributes of bicycles allow for an expansion of the use of the bicycle beyond just transport trips.
Call for improved infrastructure and subsidies
Australia has strong subsidies for electric vehicles, and the government hopes to reduce carbon emissions by encouraging the use of electric vehicles. Queensland has increased the subsidy for electric vehicles from A$3,000 to A$6,000 in April this year, and at the same time, the Australian federal government has enacted a tax exemption policy and cancelled the import tariffs of 5 per cent, but it has not provided similar subsidies for electric bicycles, which is comparable to that of Europe and the United States. Compared with Europe and the United States, Australia lacks corresponding subsidies for e-bikes.
As the popularity and use of e-bikes grows, there are increasing calls for the construction of bike lanes and for subsidies. A Queensland government spokesperson for transport and major roads said that "rebates for e-bikes are not being considered at this time, but from 2022 onwards A$268.8 million will be spent on infrastructure, including bike lanes, shared-use paths and bridges, to encourage the trial of e-bikes. Bridges, and the government is looking at future incentives to encourage the trial and purchase of e-bikes", and a Norwegian study examined the impact of a subsidy scheme in Oslo on willingness to buy, with nearly half of owners saying that whether or not they were subsidised largely influenced their decision, proving that subsidies can directly stimulate increased sales in the market.
Tasmania is the first region in Australia to offer an e-bike subsidy scheme, with the government saying in September this year that it would spend $1.2 million to subsidise consumer purchases of e-bikes, e-scooters and e-vehicles. Options for delivering the e-bike scheme include a try-before-you-buy scheme, purchase assistance and a direct subsidy, which, according to the Microtransportation Report, will take the form of a subsidy that will be announced in November. Tasmania's move also opens the floodgates for e-bike subsidies in Australia.
Compared to Europe and the US, Australia's e-bike market is lagging behind, but has great potential. Currently, the penetration rate of e-bikes is only around 10%, and with the government's improvement of cycling infrastructures and the provision of product subsidies, the development of e-bikes will grow further, and Australia may become an important growth market for e-bikes globally in the future.We at Gravity are also looking forward to contributing our share to the electric vehicle market in Australia!