The Electric Motorcycle Industry Is Experiencing An Investment Boom

"Right now, it's a great time to start a business in electric motorcycles," said Wu Daoxian, the founder of "Chigalu Drive", a company specializing in intelligent electric drives. The electricization benefits in the automotive sector are spilling over to the e-bike and electric motorcycle sectors, and eventually, there will be "new forces" like Tesla.

The global motorcycle market size is approximately 60 million units. Among them, about 92% to 95% are gasoline-powered motorcycles. Therefore, there is great potential for the replacement of electric motorcycles. Similar to the electric vehicle industry chain, China's electric motorcycle industry chain also ranks at the world-class level.

So they can take a two-pronged approach, such as going into the maritime industry. Investors are also starting to bet on electric motorcycles. The intelligent electric motorcycle developer "PeiDian Technology" received a billion-dollar A-round financing last year, and the Pre-A round investment came from Legend Ventures. At the same time, other newly established electric motorcycle enterprises such as "Chigalu Drive", "Shark Bay Technology", "Horwin Off-the-Record" and "SWAP" have also received attention from venture capital, and the number of investment and financing events has accelerated. Among them, "Daofen Ride Power" completed 6 rounds of financing, and its valuation soared to 8-10 billion RMB. Most of these enterprises choose to produce mid-to-high-end electric motorcycles and are favored by investment institutions.

In addition, "Moxiu Chuxing" and One Moto have both completed a new round of financing this year. Rough statistics show that well-known institutions such as Peak K2VC and Yingke Capital have already entered the electric motorcycle sector, seeking the Tesla of the electric motorcycle industry.

Meanwhile, traditional motorcycle manufacturers are also accelerating their expansion, including electric two-wheeler transformation enterprises and fuel-powered motorcycle manufacturers. For instance, Yadi has collaborated with Porsche to launch high-end electric motorcycles, Ele.me has invested 1 billion yuan in the electric motorcycle project, and Japanese motorcycle players such as Honda and BMW are also advancing their electrification strategies.

In 2023, the top five enterprises in terms of electric motorcycle sales in China were Yadi Technology Group, Zhejiang Luyuan, Dongguan Talin, Zongshen Group, and Jiangsu Xinri. The CR5 (the combined market share of the top 5 enterprises) reached 85.8%, indicating a high level of market concentration. Among them, Yadi ranked first with 221.86 million units sold, and its market share reached an astonishing 46.1%, far ahead of other companies.

However, the new players are not intimidated by these traditional players. They believe that the technical requirements for electric control are quite high, and it is difficult for traditional electric motorcycle players to recruit relevant talents from outside. Moreover, the development of electric vehicles has led to a reduction in the cost of power batteries, and the benefits will be passed on to the electric motorcycle industry.

Regarding the electric motorcycle policies in China, some cities have imposed "motorcycle bans", causing some start-up companies to shift their business focus to overseas markets. However, the electric motorcycle industry chain is competitive, and foreign users pay attention to performance, which is precisely the strength of Chinese electric motorcycle enterprises.

Investors are paying attention to electric motorcycles mainly because of the travel scenarios. For instance, in the underdeveloped markets, there are often travel scenarios where taking a taxi is not cost-effective and cycling is too far. This is where electric motorcycles present an opportunity. Electric motorcycles have huge market potential. In the future, the electric motorcycle industry is expected to continue to grow rapidly and may produce innovative enterprises similar to Tesla.