Fuel Prices Continue to Drive Growth in Australia’s eBike Market

At the end of September, petrol prices in Brisbane, a city in Australia, hit a historic high, and nationwide petrol prices remain significantly higher than 2 US dollars per liter. The soaring petrol prices have made car travel an expensive burden, coupled with high car insurance and maintenance costs, increasing travel expenses have become a barrier to car usage. Many Australians are now seeking alternative modes of transportation to replace cars. The more affordable and convenient electric bikes, as a lower-cost alternative to cars, have become a new choice for many Australians.

Market Choices Amid Multiple Considerations

Research from the Australian Automobile Association found that in 2022, transportation costs for families in several state capitals in Australia increased by 8.8%, and transportation costs in remote areas increased by 10.1%, far exceeding the overall inflation rate of 6%. The rise in transportation costs directly led to a decline in car usage.

Francisco, a commuter from Australia, stated that she mainly uses electric bikes for daily commuting. In addition to her own car, she also uses car-sharing services. She also subscribes to an electric bike from the rental company Lug+Carrie for 59 US dollars per week.

Electric cars are generally not affected by the surge in petrol costs, and their sales have also increased significantly compared to the same period last year. In the first nine months of 2023, sales of pure electric vehicles (EVs) in Australia more than doubled. However, the entry threshold for electric cars is high, with a basic starting price of 40,000 US dollars, and the second-hand market is just beginning to develop. Therefore, electric bikes, which are relatively affordable, have become a low-cost alternative to high fuel consumption cars. With the increasing usage of electric bikes, many rental companies have emerged, providing cost-effective options for short-term users.

Continued Growth in the eBike Market

Since 2017, various states and cities in Australia have passed uniform laws regarding the use of electric bikes, and the Australian electric bike market has steadily grown. By 2022, sales had multiplied by about five times, with over 100,000 electric bikes sold. The growth in the family and cargo markets was particularly significant. After abandoning car travel, there was an increased demand for models with child seats, leading to continuous growth in electric bike sales.

In Australia, the price of an entry-level electric bike is approximately 2,000 US dollars. Cargo models suitable for family travel cost around 5,000 US dollars, and premium models can reach 20,000 US dollars. While some high-end models are expensive, they are not only cheaper to purchase than cars but also have significantly lower operating costs. The average charging cost for bicycles is about 15 cents, and there is no need to pay parking fees. Compared to cars or public transportation, the operating costs of bicycles are much lower.

Nevertheless, cars remain the best choice for long-distance travel. Electric bikes are most popular in suburban areas within 5 to 15 kilometers from the central business district, becoming one of the main means of diversified travel for people.

In addition to economic considerations, leisure and exercise are also the main reasons people start cycling. The sport and fitness attributes of bicycles have expanded their usage scenarios beyond transportation.

Calls for Improved Infrastructure and Subsidies

Australia has strong subsidies for electric cars, aiming to reduce carbon emissions by encouraging electric car usage. In April this year, the Queensland state raised the electric car subsidy from 3,000 Australian dollars to 6,000 Australian dollars. The federal government of Australia also issued a tax exemption policy, canceling the 5% import tariff. However, there are no similar subsidies for electric bikes. Compared to Europe and the United States, Australia lacks corresponding subsidies for electric bikes.

With the popularity of electric bikes and the increasing usage, there is a growing demand for bike lane construction and subsidy calls from the public. A spokesperson for the Queensland state government’s transport and main roads department stated, ‘There is currently no consideration for rebates on electric bikes, but starting from 2022, 268 million Australian dollars will be spent on infrastructure construction, including bike lanes, shared roads, and bridges. The government is studying future incentive measures to encourage the trial and purchase of electric bikes.’ A study in Norway examined the impact of a subsidy program in Oslo, with nearly half of the car owners stating that whether there is a subsidy greatly affected their decision. Subsidies directly stimulated the growth of market sales.

Tasmania was the first region in Australia to offer an electric bike subsidy program. The government stated that Tasmania would invest 1.2 million US dollars in subsidies for electric bikes, electric scooters, and electric cars. The options for the electric bike subsidy program include trial first and then buy, purchase assistance, and direct subsidies. The form of subsidies will be announced in November, and Tasmania’s move has opened the door for electric bike subsidies in Australia.

Compared to Europe and the United States, the development of Australia’s electric bike market lags behind, but it has great potential. Currently, the penetration rate of electric bikes is only about 10%. With the improvement of government investment in bicycle infrastructure and the introduction of product subsidies, the development of electric bikes will further grow. In the future, Australia may become an important growth market for electric bikes worldwide.

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