A model of this text ran within the September situation of Bicycle Retailer & Business Information.
JIANGSU, China (BRAIN) — The e-bike trade is amid a tightening battery pack market with many cell suppliers placing producers on allocation, leading to longer lead occasions and the potential for greater costs.
Pack producers have been challenged with a scarcity of lithium-ion battery cells because the starting of the yr. Causes embrace booming electrical automobile and electrical instrument markets, and the COVID-19 impact on workforce productiveness.
“Furthermore, we’ve got to think about one other issue: The e-bike manufacturers might place orders greater than what they want,” stated Luc Liu of Phylion Battery Co. in Jiangsu. “As an illustration, you want solely 10,000 batteries, however you are concerned concerning the provide of the battery pack, so that you place orders 3 times 10,000 or 3 times 5,000 to a few completely different battery-pack suppliers, as a result of it is unsure for you which ones can provide well timed and sufficient. Such operation strengthens, kind of, the sensation of scarcity.”
Liu is basic supervisor of the Phylion e-bike battery division, one of many largest world suppliers.
He stated electrical automotive firm Tesla has drained the battery market, noting that one electrical automobile requires sufficient cells to make 100 e-bike battery packs.
He additionally famous battery producer Samsung acquired a brand new electrical automobile buyer, Rivian, “which takes an vital share of Samsung SDI manufacturing functionality,” Liu stated.
TTI — mum or dad firm of cordless instrument manufacturers Milwaukee, AEG, and Ryobi — and the Bosch cordless instrument division have elevated demand on battery-pack producers as nicely.
“Furthermore, COVID-19 influence is one other issue,” Liu stated. “Samsung SDI Malaysian cell manufacturing unit has been (affected) by COVID-19, and manufacturing output decreased. Within the meantime, the designed manufacturing functionality of the three giants — Samsung SDI, LGC and Panasonic — has not expanded up to now years.”
Consequently, Liu stated, the Korean and Japanese cell suppliers haven’t been capable of meet e-bike battery demand, with Samsung, LG Chem, and Panasonic halting manufacturing of some cells.
“In line with predictions, the scarcity will proceed till not less than H2 of 2022,” Liu stated.
He added Phylion will probably be relying extra on Chinese language model cells. Final yr, Chinese language model cells have been used for five% of Phylion’s e-bike battery packs. This yr, it is rising to greater than 30%.
“However such a change has a variety of price and time,” Liu stated. … It isn’t merely to vary the cell in manufacturing; we’ve got to check the packs, get a certificates earlier than mass manufacturing. It takes 10~20 weeks. In case we’ve got many fashions for such change, it consumes big engineering work and cash.”
Liu stated a less-expensive battery pack does not essentially imply poorer high quality, however a model must know why a pack prices much less and at all times take care of a good provider.
Shortages might result in greater costs, however not till subsequent yr, Liu predicted.
“It is tough to say how a lot it would rise due to the uncertainty of many elements,” Liu stated. “From This autumn of 2020 to Q3 of 2021, the battery pack value has risen 10-20% as a result of price improve of cells, chips, and different supplies. I am a bit bit optimistic that the battery pack value will rise lower than 10% (by) 2022. I can not say my view will probably be very right. Let’s have a look at what is going to occur.”
Bob Margevicius, Specialised Bicycles govt vice chairman, stated battery manufacturing may be very capital intensive, with few cell producers globally. “Security and integrity considerations drive most customers to well-respected manufacturers with restricted — however rising — urge for food for native China made cells,” Margevicius stated. “Very similar to the microprocessor scarcity, this restricted provide will probably be with us for months to return, and till there may be extra manufacturing or options to service rising world wants.”
Mike Fritz, chief know-how officer of Human Powered Options, stated he is heard of no impending battery pack shortages, however three trade specialists he contacted reported demand for cylindrical lithium-ion cells utilized in e-bike battery packs has by no means been greater.
“Whereas shortages are usually not a problem now, it is conceivable that it could possibly be an issue sooner or later,” Fritz stated.
Having long-term provider relationships has helped e-bike producers Pedego and Vvolt keep away from shortages.
“Every single day brings new supply-chain challenges ever since final spring when that insidious virus wreaked havoc on the world,” stated Pedego CEO Don DiCostanzo. “However Pedego has been capable of present our now 200 shops with a gentle stream of our merchandise, together with batteries.”
In actual fact, DiCostanzo stated, regardless of the challenges, Pedego lately launched its third-generation battery that includes a number of enhancements, together with a rear wraparound taillight with turn-signal and brake-light capabilities.
Mike McBreen, the COO of Rad Energy Bikes, stated demand from electrical automobile and power makers is straining the capability of battery makers. He stated Rad Energy has long run commitments from main cell and pack suppliers. “We needed to transfer rapidly; we do not take that concern evenly,” he stated.
New direct-to-consumer Vvolt additionally has secured a dependable partnership with Taiwanese battery pack provider Celxpert. Kyle Ranson, Showers Go proprietor and Vvolt founder, beforehand labored within the high-tech sector with Compac and HP and knew the advantage of establishing the correct battery vendor relationship.
“They actually bought began within the early days of supplying lithium-ion to the PC distributors, batteries for notebooks, and so forth.,” Ranson stated. “I used to be conscious of them due to my earlier life, and so after they hit the radar, it is going to be essential that we align ourselves with any person who’s been across the avenue. Their provide chain is mature. We consider we’re in a fairly stable place. The entire provide chain is a whole mess proper now. At the least on the battery facet, we’re in fairly fine condition.”