Economy

This Dutchman builds e-bikes according to the philosophy of Elon Musk – and heads for a turnover of 100 million euros

More and more cities are redesigning the central road in favor of cyclists. The demand for e-bikes is increasing rapidly.

This benefits the Dutch e-bike startup Vanmoof, which is expecting sales of EUR 100 million this year.

The founder is inspired by Tesla boss Elon Musk’s design and sales strategy.

Taco Carlier has never experienced such a flood of orders in the eleven-year history of its company. The boss of Vanmoof, a Dutch e-bike manufacturer, presented the new generation of his high-tech bikes at the end of April and, according to his own statement, sold more than 10,000 pieces worldwide within the first three weeks. In Germany, sales between February and April increased by 226 percent compared to the previous year.

For fear of infections in buses and trains, people are currently getting on their bikes in bulk. Carlier expects the trend to continue even after the Corona crisis: “I firmly believe that we are at the beginning of a revolution. Thanks to e-bikes, the number of cyclists will increase. We are already seeing this in cities like San Francisco or London.

Just a few days ago, for example, the Mayor of London announced that it wanted to redesign central streets so that they could withstand a tenfold increase in bicycle traffic after the end of the blocking measures. German cities like Berlin are also testing wider cycle paths at the expense of drivers. Covid-19 is accelerating this change, Carlier said. “Everything we’ve predicted for the next ten years is going to happen in three months.”

In fact, the market for e-bikes was already booming before the Corona crisis. In 2019, around 1.36 million electric bicycles were sold in Germany – almost 39 percent more than in the previous year. The market is becoming more professional and prices are rising to an average of 982 euros per bike including e-bikes – an increase of 30 percent compared to 2018. A billion dollar business that is increasingly displacing the classic bicycle. The market share of e-bikes in the entire bicycle market is currently 31.5 percent.

From ten to 40 million euros in one year

Vanmoof wants to benefit from this – and does a lot differently than the competition. The company, which sees itself as Tesla among e-bikes, has recently collected an investment of 12.5 million euros from London venture capitalist Balderton Capital and electronics supplier Sinbon Electronics. Vanmoof had previously raised over six million euros through crowdfunding and a small round of financing from Slingshot Ventures in 2017.

For a bicycle company, venture capital financing is an unusual way. But: Taco Carlier sees Vanmoof not as a bike manufacturer, but as a tech company. A glance at the staff shows that: Vanmoof’s software team is almost as large as the hardware team. A total of around 180 employees work at the headquarters in Amsterdam, and 290 worldwide.

Carlier has big ambitions: he wants to sell his e-bikes to a billion people. This can only be achieved through “high quality at an affordable price,” he says. So far, the plan has worked. Vanmoof quadrupled sales from ten million euros in 2018 to almost 40 million euros in 2019. This year it is expected to rise to 100 million. According to the company, sales have been consistently 20 percent above plan since the beginning of the year. If you order from Vanmoof today, you have to wait three months.

Parallels to Tesla

The hype surrounding the monochrome high-tech wheels has a lot to do with the new pricing strategy. With a new price of 1998 euros, the two models S3 and X3 are around 40 percent cheaper than the previous generation – and not much more expensive than e-bikes from discounter brochures.

The strategy of entering the market in the luxury segment and then opening up the mass market through volume and economies of scale was already formulated by Tesla boss Elon Musk in 2006 in his “master plan” for the spread of electromobility. The parallels to the US automaker can hardly be overlooked. It starts with the naming. Vanmoof has given its two model series the abbreviations S and X, analogous to Tesla’s Model S and Model X.

In terms of design, the e-bikes are unmistakably based on the aesthetics of the Silicon Valley to manufacture products from a single source. Bulky elements such as cables, gear shift, bell and lighting system disappear into the housing. What remains is a sleek shape that is staged in the promotional videos in time with electronic basses and in close-up – in the style of Tesla.

The technology focus of the Dutch also reminds of Elon Musk’s product philosophy. The e-bikes should be more than a means of transportation. They are computers on wheels that adapt to the preferences of their drivers. In the latest generation, the gear shift and the warning tone of the bell can be set, for example, using a smartphone app. The owners can also unlock and locate the bike via the app. The vehicle also has an integrated display on the frame that shows the battery level.

In addition to the naming and the high-tech focus, a third parallel to the US carmaker is striking: Vanmoof’s business model is based on control over the entire customer experience, from purchasing in its own branches to repair subscriptions and a tracking service in the event of a Theft.

E-bike expert: Concept can be lasting success

The e-bike expert Hannes Neupert sees good chances that the concept can be a lasting success. Similar to Tesla, the Dutch put the software functions in the foreground with their products, but used components such as the engine or the battery would not be communicated openly.

This sets Vanmoof apart from the competition: “Traditional e-bike manufacturers market their bikes as parts stores, for example by writing large letters on the frame that the electric motor comes from Bosch or the gear shift from Shimano,” says the chairman of the Extra Energy association, who deals with light electric vehicles. “Vanmoof offers customers a simple and independent branded product that hits the nerves of big cities with features like the built-in anti-theft protection.” Neupert finds the problem that the batteries of the high-tech bikes cannot be removed: “Fixed batteries increase safety, save weight and offer manufacturers more freedom in terms of design. ”As with smartphones, this trend will also prevail in e-bikes.

Vanmoof founder Taco Carlier makes no secret of his admiration for Elon Musk. The love for Musk’s car company even goes so far that Vanmoof has a Tesla as a company car. In addition to the tech pioneer, former Apple chief designer Jony Ive was also a great inspiration.

Parking tickets aroused the entrepreneurial spirit

Vanmoof was less tech-oriented in the early years. Carlier started the bike company in 2009 together with his brother Ties. The founding was allegedly preceded by several traffic tickets that Carlier received from the police because of the constantly defective lighting on his Dutch bike.

The engineers studied then developed a prototype that integrated components such as an LED system or lock directly into the frame. The Carlier brothers also hid the chain behind a specially adapted housing. “We wanted a robust bike that was still elegant,” said Taco Carlier to the business magazine Brandeins.

The first Vanmoof bikes sold properly. However, according to Carlier, they did not become a mass product because the minimum price of 600 euros at that time was not in proportion to the high risk of theft for many city dwellers.

According to Carlier, demand did not increase until 2014 when Vanmoof launched the first model with an electric drive and integrated GPS sensor. The bike could now be easily located and returned to the owner after theft. In the meantime, service has become an important part of the Dutch business model: According to the company, around 50 percent of buyers add the chargeable theft guarantee to their bike.

Success could be copied

In total, Vanmoof says today, more than 120,000 bikes have been sold since it was founded. 80 percent of it through their own online shop. Industry expert Hannes Neupert does not consider Carlier’s goal of reaching a billion e-bike drivers an exaggeration – even if he does not see Vanmoof as a measure of all things despite all the hype. “If you have sufficient funds, can build up high inventories and rely on online sales with good service, you will also sell many e-bikes.”

The market is still at the very beginning, especially since many people have not yet enjoyed the “special driving experience”. “In Europe alone, up to 750 million people can theoretically be equipped with an e-bike,” Neupert estimates. He sees the Belgian e-bike provider Cowboy as a promising challenger to Vanmoof, who is pursuing similar goals.

With the latest round of financing, Taco Carlier is also likely to have started a duel for market leadership in the e-bike segment. Vanmoof intends to use the 12.5 million euros to ramp up its production capacities and open new stores.

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