When I was recently looking to get an e-bike I was surprised at how much they cost. Considering that electric bikes are just like normal bikes but with a motor and a battery, you wouldn’t expect their prices to be much higher.
So why are e-bikes so expensive? The cost of the motor and battery on electric bikes greatly inflate their price. The batteries used on electric bikes can cost as much as $1000 which causes their price to increase. Electric bikes also have low sales volumes reducing the cost savings from economies of scale.
Electric bikes will typically start at $1000 and higher quality e-bikes start at $2000. The prices of electric bikes can come as a surprise to many people but there are actually a number of factors that cause the prices of e-bikes to be as high as they are.
What Causes Electric Bikes to be Expensive
- The battery
The main thing that causes the cost of electric bikes to be higher than ordinary is the battery. The batteries on electric bikes will typically cost around $500 and the better ones that need to be specially made can cost as much as $1000.
The batteries on electric bikes will almost always be lithium-ion batteries since they are more efficient. This is important on electric bikes where minimizing the weight of the bike matters since it will allow for the bike to be easier to cycle.
- The motor
The other thing that drives the cost of e-bikes up that ordinary bikes do not have to worry about is the motor. The purpose of the motor is to use energy from the battery to make one of the wheels turn when you pedal or when you twist a throttle depending on whether you have a pedal assist e-bike or a throttle assist e-bike.
The motor increases the price since they need to be specially fitted this means that they increase the labor cost and the increase the cost of parts since they’re normally bought from companies that make them special.
- No economies of scale
Since electric bikes are still quite a niche market it means that electric bike manufacturers are not able to do things in bulk. This means that it’s not easy for them to benefit from economies of scale which are the cost savings made from being able to do things in large batches. The makers of ordinary bikes can be reasonably sure that they will be able to sell high quantities of their bikes. This allows them to buy parts in large batches, get better rates with wholesalers and to be able to have their staff specialize in certain tasks more. All of these things allow manufacturers of ordinary bikes to reduce the cost of each bike but e-bike manufacturers can’t do this due to their lower order quantities.
- Needs higher quality components
Since the extra power provided from the motor means that you will be able to cycle an e-bike at a higher speed than an ordinary bike it means that it will be important to have parts that you can rely on. For example, when you’re cycling at over 20 mph it is important that the brakes will be able to make you stop quickly. But, having higher quality parts will raise the price of the bike since they come with a higher cost.
- They’re heavy
Due to the added weight from the battery and the motor electric bikes tend to be around 20 pounds heavier than they would have been if they were to be an ordinary bike. The extra weight means that the cost of shipping the parts will be higher. This can cause the prices of electric bikes to increase.
- Still early stages
The graph above shows the number of google searches for the term “electric bike” over the last ten years. As you can see the popularity of electric bikes stayed constant right up until 2017 where we have seen a rise in the popularity of e-bikes.
Since e-bikes have only really gained popularity in the last 2 years it means that there are still not as many manufacturers in the market as there could be. This means that there is less competition among manufacturers to compete on price so the prices are higher. With that being said increasing competition could be about to change that.
Other E-Bike Costs to Consider
If you are considering getting an electric bike then there are some additional costs that come with electric bikes that you should consider.
The cost of charging an electric bike is very low. Depending on the cost of electricity in your area the cost of fully charging an electric bikes battery will be a few cents.
As shown here in a blog post at the electricbikereport.com the cost of a 12 mile trip in Arizona would only come to 2.94 cents.
But, as one of the commenters mentioned, the real cost comes from replacing the battery. He mentions that if you were to factor the battery replacement cost into the charging cost then the cost of a 30-mile trip would actually be $1.
- Replacing the battery
The biggest on-going cost that you will face with an electric bike is the cost of replacing the battery. The cost of replacing the battery can go from $300 to $1000 depending on the quality and how specialized the battery is. Most electric bike batteries will last for 500 charging cycles and some are rated to last for over 1000 charging cycles. There are a number of things that you can do to increase the lifespan of the batteries that I have written about here.
The other on-going cost that you will have to deal with on electric bikes is the cost of replacing parts as they wear down. The good news is that you will usually be able to do this at a local bike shop so the cost of repairing parts on the bike shouldn’t be too high.
You can read more about e-bike costs here.
Will electric bikes get cheaper? Whether or not e-bikes get cheaper will depend on how many new entrants there are into the e-bike space and on whether or not the cost of batteries is going to fall. As you can see from the google trends graph above there has been a lot of increased demand in the market in recent years so it is likely that new manufacturers will start to offer their own e-bikes which should help to bring their cost down.