19 May 2020

GM Pulls Plug On Electric Bikes

Many moons ago, during my "Ayn Rand phase," I was trying to understand how markets, and the stock market, worked.  During that time, I chanced upon a book by someone (whose name I've forgotten) lost all of his money--and some he borrowed from relatives--in the stock market while it was at record highs.

I forget which stocks, exactly, he bet on and lost.  I have to credit him, however, with this:  He helped me to realize, at a tender age, that the stock market really isn't much different from a casino.  Years later, during the boom of the 1980s, I would come to learn that many of those gamblers in expensive suits were coke (and I'm not talking about The Real Thing) addicts.  

Still, it's interesting to ponder the question of why some prosper during hard times while others who seem to be doing all the right things fail just when conditions seem right for their success.

In the latter category is General Motors.  I'm not going to talk about their 2009 bankruptcy which, along with the insolvency of Chrysler Motors, almost turned the crisis of 2008 into a full-blown depression.  Rather, I am going to mention their latest ill-fated move:  Their entry into the e-bike market.

Late in 2018, GM announced its electric bike program with a flashy contest to name the e-bike.  From it, the name "Ariv" emerged and was introduced in February 2019.  GM offered two models:  The Ariv Meld was an electric bike, while the Ariv Merge was the same bike with a folding mechanism. 

Both bikes were made to comply with Europe's strict e-bike regulations, which meant that they had no hand throttle (like you'd find on a motorcycle) and instead were equipped with four levels of pedal assist.  In further compliance with European mandates, the bikes had a top speed of 25 km/hr (about 15.5 mph).  In the lowest power mode, the Ariv battery had a potential range of 64 kilometers (40 miles).

General Motors has just announced that it will cease manufacturing of Arivs.  While GM blames COVID-19's effects on their bottom line for their decision, I suspect other factors were at play.  One could be the price of those bikes:  2800 Euros (about 3060 USD at today's rates) for the Meld and 3400 Euros (3710 USD) for the Merge in Belgium and the Netherlands.  Even if the quality of those machines were commensurate with their prices, not many people, particularly first-time buyers (who, at this point, are still most of the market) would want to spend that much.  And not many delivery people, I imagine, could afford them.

Also, I imagine not many people would want to spend that much money on a bike with small wheels--unless it's a Brompton.  My own amateur observation leads me to believe that there is not much "crossover" between the market for Bromptons (or, for that matter, less-expensive folding bikes like the Dahon) and the market for electric bikes.



Arivs, as far as I know, were sold only in Europe.  There were plans to sell modified versions that could go 20 mph (33 kph)  for the USA, but  I don't know whether any such  bikes were made or sold.  I think, based on my amateur observation, that the bike would have needed larger-diameter wheels to succeed in America.

Anyway, GM pulling out of the e-bike market has not deterred other automotive companies, such as BMW and Skoda (a Czech automaker popular in Europe if little-known in the US)  from working to develop their own electric bikes and scooters. Spanish carmaker Seat, meanwhile, has recently launched their own micromobility (the name of the category that includes e-bikes and scooters) offerings.  


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