The e-bike market is expanding rapidly, with sales predicted to grow from 3.7 million in 2019 to 17 million by 2030. Meanwhile younger generations are already comfortable with the shift from 'ownership to access' thanks to now-ubiquitous music and media subscription services.
E-bike to go has responded to this willingness to forgo ownership in favour of using Products-as-a-Service (PaaS), the increasing climate awareness and the rising popularity of e-bikes to help its customers get around sustainably and flexibly.
New finance for a new type of business
The market for e-bikes and subscription models may be growing rapidly, but financing structures in the PaaS sector are relatively new and are more risky than regular ownership models.
"In a subscription model it's about usage and cashflows linked to that usage," says Joost van Dun, ING's circular economy lead. "This requires another way of looking at the finance structure."
Several ING departments, including Sustainable Finance and Midcorporates Netherlands, have joined forces to develop a framework to assess these finance structures, taking into account the sustainable and circular aspects of the transaction as well as the business model, the market and the financial parameters.
"More customers [in a PaaS model] also means more options for the supplier to improve and recycle and reuse the products at the end of their lifecycle," says van Dun. "ING has developed a rating model to value sustainability, and E-bike to go scores highly on this rating, which was an important reason for us to support the company."
With ING providing a loan for 5,000 new e-bikes, E-bike to go is expanding its services throughout the Netherlands and beyond.
"Demand for our bikes has grown exponentially in the wake of the pandemic, by more than 170%." Jelle Visser, founder of E-bike to go
A new phase of e-bike expansion
"Germany has the largest market for e-bikes in Europe, but southern European countries like Spain and Italy show the fastest growth," says Jelle Visser, the founder of E-bike to go. "Our goal is to grow our fleet by 300% in 2022."
Covid-19 has given that goal an unexpected boost. "This year we entered the German and Belgian market, where we provide a sustainable alternative to food delivery companies that use cars or scooters," says Visser. "Demand for our bikes has grown exponentially in the wake of the pandemic, by more than 170%."
E-bikes can replace cars for short-distance commuting, thereby lowering CO2 emissions. "Riding an e-bike currently is the most sustainable option for urban transportation," says Visser. And e-bikes are not just for commuters: E-bike to go provides bikes for businesses, too. About 70% of its bikes are used in B2B – mainly for home delivery, but also by hotels or by companies for their employees.
Infrastructure needs a tweak
Cities will have to respond to this e-bike boom and improve their infrastructure – by widening bike lanes, for instance. The EU has made some moves in this direction: in 2020, it announced that it had already spent €1 billion on cycling infrastructure since the outbreak of the pandemic.
One aspect of electric infrastructure that cities should not be deterred by is charging. That's because unlike electric vehicles, e-bikes don't solely rely on electric charging infrastructure. All e-bikes can be charged from regular plugs and with batteries, and with a fast charger will be fully charged within four hours.
A lasting investment
Sustainability runs through the centre of the PaaS model: the longer the product lasts, the longer a subscription can be taken for its usage. So the quality and design of an e-bike is crucial. E-bike to go's design makes the bikes robust and durable, with components that are easily repaired or recycled in order to reduce waste.
After four years of use, the bikes are refurbished, which helps them to last another four years. And the anonymous data E-bike to go collects from its customers gives it insights into how the e-bikes are being used – which means they can perform preventative maintenance and increase product longevity.
In early 2021, GreenMo, a European market leader in e-mobility rentals, acquired E-bike to go, which is expected to create synergies between GreenMo's fleet of shared e-scooters and E-bike to go's e-bikes, including network sharing and joint maintenance.
All of this adds up to a powerful proposition. "Given the strong and growing demand for e-mobility and shared e-mobility," says ING's van Dun. "We expect growth potential for E-bike to go not just in the Netherlands, but also internationally."