Thomas White Global Investing
China
China Stamp
February 26, 2010
A Postcard from Asia Pacific
China: E-cycling the Way to the Future

A typical Chinese e-bike

E-bikes are also very popular in Europe where lithium batteries are used instead of the lead acid batteries found in China.

What do you do if your country is on the way to becoming one of the most polluted places on earth? Do you reek in the smoke of a million cars or do you search for alternatives? The Chinese, it seems, prefer to search for alternatives. As the country grapples with a clouded environmental future, the Chinese are turning to electric bicycles for a green salvation.

Compared to just around 200,000 in the U.S., close to 120 million of these electric or e-bikes are already on the road in China. And that number is set to grow in the years to come, especially considering that these bikes afford a practical, economical and environmentally-friendly solution to the problems that may plague China’s future. Most of these bikes are based on an internal combustion engine and can reach speeds of around 21 miles per hour. They often come with pedals and are incredibly adept at navigating through traffic, a big asset, considering the chaos and mayhem that clogs many of China’s big cities. Small wonder then that manufacturers expect to sell 22 million of these in China this year alone.

In fact, in a new study by Pike Research called ‘Electric Two-Wheel Vehicles,’ worldwide sales of e-vehicles are set to explode over the next six years, with almost 466 million expected to be rolled out worldwide. Pike Research believes that these vehicles will be ‘engines of economic growth.’ Not surprisingly, China is also the biggest producer of these bikes. Nearly 1000 companies are engaged in their manufacture in the Middle Kingdom. The Chinese Bicycle Association says that it exports these e-bikes to more than 170 nations now.

It is easy to see why these bikes are all the rage in China. Although China is poised to become an exciting automotive market, not all in the country can afford cars. In contrast, these bicycles generally cost just around $240, and are virtually maintenance free, except for the batteries that need to be replaced. And let’s not forget the fact that they do not depend on ever-rising gasoline prices. As an added bonus, they require neither registration nor a license.

Despite their overwhelming popularity, there are a few doubts. Concerns have been expressed about the recycling of the five lead acid batteries that are packed into a typical Chinese e-bike. The Asian Development Bank went as far as to call for a replacement of the lead acid batteries, despite hailing these bikes as the ‘most environmentally sustainable motorized mode available.’ Europe simply resolved the problem by ordering lithium batteries for the bikes it imports from China, which of course, are more expensive.

The demand though is simply too vast to ignore. Whatever the doubts, as the 21st century lurches painfully into a polluted tomorrow, it is clear that the world needs to find cleaner, greener ways to transport itself. Traditional cars or buses have not been the answer. But in these e-bikes, China seems to have found an answer all its own. Navigating the traffic of Shanghai has never seemed so easy. Easy on the environment, and easy on the wallet.

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