Zoomo Insights: The LEV Supply Chain

In 2020 the global e-bike supply chain that tightened and almost snapped, leaving many customers and suppliers waiting impatiently for their two wheels. 

The long-term effects will probably be beneficial, as manufacturers and retailers are forced to look at their business models and supply chains, and improve their processes and relationships. In the short term though, it’s been a battle for hardware providers - and indeed even devastating for some suppliers.

How businesses were affected by the pandemic 

Covid affected businesses everywhere around the world. A very small proportion benefitted, but most felt the effect of lockdown and disruption. For any assembled products sourcing multiple parts from overseas - enter Asia - it was a particularly difficult period.

In the case of most e-bikes, frames are manufactured in Taiwan, parts from Japan and elsewhere in Asia, and assembly takes place in Europe.  When lockdown first hit Asia and production lines shut down, the Western world was still going about it’s business, largely naive to the building virus tsunami.  Bikes were being ordered as normal and the genesis of a backlog had begun.

For mature businesses such as the car industry, that backlog would be caught up fairly quickly due to a ‘just in time’ production approach and long standing relationships with suppliers.  Favours could be called in and reciprocal beneficial agreements drawn up.  For e-bike manufacturers at the start of their journey however, buying more affordable parts from disparate suppliers in a bid to create cheaper margins were shoved to the back of the queue. 

Shifts in the international market

When things actually did get moving again, there was the question of shipping.  Once more, e-bikes went to the back of the queue as shipping containers on freight liners sat backed up outside major UK and US ports. Waiting to unload.

Almost symbolically in the middle of the crisis, a massive freight ship wedged itself in the Suez Canal, blocking traffic. It was like accidentally dropping your car keys down the drain, when you’re late for work.

And yet the world ordered e-bikes like never before.  Boredom in lockdown meant people bought all sorts of things online.  Freedom from lockdown meant people wanted to be outside.  With borders still shut, demand for caravans, cycles and e-bikes went through the roof.

Waiting times for orders online became horrendous, prices were hiked by suppliers who had bikes ready to go, as they needed to make ends meet until the situation settled down again. ‍

A way forward‍

In the long run, things will settle down and improve.  Increasingly manufacturers will look to form stronger supply partnerships and relationships, the availability will catch up and the market will start to mature.  E-bikes will continue their phenomenal growth once more, (eco)fuelling people’s need for affordable, clean transport solutions.

E-bikes like the Zoomo Sport will populate Aussie cities and speed your food delivery or route to work.