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Monday, May 23, 2022

The Electric Bike

By HOWARD FINE

Staff Reporter

Tucked away inside the Calstart building next to Burbank Airport, retired engineer and inventor Joe Stella is busy pushing what he terms “the perfect human hybrid vehicle” – the electric bicycle.

Stella’s company, BAT Electrobike (BAT stands for battery automated transportation), is one of the oldest of the 33 companies at Calstart trying to jump start an electric transportation industry.

But unlike its headline-grabbing counterpart, the electric car, the electric bicycle is only now beginning to catch the public’s attention. Electric bicycles are similar to mopeds, but they have an on-board electric motor rather than a gasoline-powered engine.

There are about a half-dozen electric bicycle makers in the United States, including BAT Electrobike, ZAP Power Systems of Sebastopol, Calif. and the joint venture of Monrovia-based Aerovironment Inc. and Santa Ana-based GT Bicycles Inc. known as Charger Bicycles LLC.

Also, in June, former Chrysler Corp. chairman Lee Iacocca formed a new company, EV Global Motors Co., to build electric bicycles and scooters. At the same time, Iacocca announced that his new company had signed a partnership agreement with Taiwan’s largest scooter maker, Kwan Yang Motor Co. Ltd., to market the electric bikes and scooters.

For some, it’s been a struggle. Transportation entrepreneur Malcolm Bricklin’s Electric Bicycle Co., maker of the EV Warrior, filed for Chapter 7 bankruptcy liquidation in March after running into financial problems.

At the time, the company’s attorney, Josephina Fernandez McEvoy, said the company was undercapitalized and had a poor sales and marketing program. The EV Warrior had been primarily distributed through car dealerships.

McEvoy said Bricklin is now seeking permission from the U.S. Bankruptcy Court to convert a portion of the Electric Bicycle Co. bankruptcy to Chapter 11, reorganizing it as solely a research and development firm. Simultaneously, he is working to set up a new company, EV American, to market the bikes.

Stella says he has learned from the mistakes of Bricklin and Electric Bicycle Co.

“They built the wrong bikes,” Stella said. “They built bikes that sell for well over $1,000 and are not very efficient,” he said, referring to the EV Warrior’s 15-mile range and 15-miles-per-hour maximum speed. “If you are going to sell electric bikes to the masses, you must price the bikes well below $1,000. Otherwise, it’s just a plaything for the well-off.”

Stella said BAT Electrobike has a two-tiered pricing system: a low-end, no-frills electric bicycle selling for about $300 and a deluxe “cruiser” bike selling for $1,000. The cruiser has a wider seat and slightly larger frame.

To date, according to BAT Electrobike Chief Financial Officer Bill Wason, the company has sold 300 electric bicycles since January 1996, virtually all within the United States.

Wason said BAT Electrobike has contracts pending – but not yet signed – on about 3,000 more bikes. Two of the larger contracts are with companies in Taiwan and China, Stella said.

Neither Stella nor Wason would disclose sales figures.

Currently, BAT Electrobike makes its electric bicycles on the Calstart premises. But Wason said the company plans to lease space in an Anaheim plant in October to mass produce the bicycles.

To date, most of BAT Electrobike’s efforts have been in research and development. Stella said he is seeking to avoid what he says was one of Electric Bike Co.’s key mistakes: not allowing for a long enough research and development period.

“They also told their investors that they would make money in two or three years,” he added. “When I sought investors back in 1992, I told them that it would be at least six or seven years before we turned a profit. That’s the kind of time frame you need in this field.”

Nonetheless, Stella said the failure of the EV Warrior has soured the U.S. market for electric bicycles.

“No car dealer will touch an electric bicycle now,” Stella said. Since bike shops have traditionally shunned scooters, mopeds and electric bicycles, that leaves a rather limited distribution channel for electric bikes in the United States.

In fact, BAT Electrobike has not sold any of its bikes through auto dealers. Instead, most of the 300 bikes sold to date have been distributed through corporate health and alternative transportation programs and retail bike stores, Wason said. A few have been distributed by government agencies seeking to promote alternative modes of transportation.

However, Stella and other electric bike makers see huge opportunities overseas, particularly in the crowded cities of Asia that now teem with standard bikes and in the narrow streets of older European cities, where concerns about pollution have soured officials on mopeds and scooters.

“There are over 400 million bicycles in China alone,” said Calstart spokesman Bill Van Amberg. “If just 1 percent or 2 percent of those are converted to electric bicycles, that’s a 4 million to 8 million bike market right there.”

Calstart President and Chief Executive Michael Gage said the electric bike industry is on the cusp of rapid growth. New bans on cars, mopeds and gas-powered scooters in Asia and Europe, as well as a recent court ruling upholding the zero-emission-vehicle mandates in New York, are expected to help power the growth.

“In the next one to three years, we are going to see an explosion of electric bike sales both here in the U.S. and internationally,” Gage said.

For now, one of the largest domestic markets seems to be police departments. ZAP Power and Charger Bicycles both have sold bikes to police departments, primarily in California. ZAP, for instance, recently sold electric bikes to the Glendale Police Department.

“They are great for cops on bicycle patrols. It gives them extra flexibility if they need to go into pursuit mode,” said Gary Starr, managing director with ZAP Power.

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Howard Fine
Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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