Electric bike stocks are becoming increasingly popular as people look for more eco-friendly and cost-effective modes of transportation. In fact, the electric bike industry is expected to grow significantly in the coming years. In 2023 alone, 280 e-bikes and mopeds hit the roads.
The Future of Electric Bike Stocks
In the U.S., e-bikes are not the juggernaut they are in some parts of the world, but bike sharing and people moving to urban areas will help propel increased U.S. sales of e-bikes.
The future of electric bike stocks looks bright. By 2025, expect to see 12 million electric vehicles being sold worldwide each year—and more than 40 million electric bikes. The industry devoted to developing bikes, motors, and components is barely getting started.
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Pros and Cons of Investing in Electric Bike Stocks
Whether electric bike stocks are a good investment depends on several factors and your individual risk tolerance. Here’s a breakdown of the potential pros and cons to help you decide:
Pros:
- Strong market growth: With e-bikes growing 11.86% each year, the total result is an overall estimated growth rate of over 75% in the next 5 years! This all means an increase in ownership and an increase in the number of e-bikes on our streets and trails. Factors like rising fuel costs, environmental concerns, increasing urbanization, and growing interest in outdoor activities are all contributing to the growth as well.
- Multiple ways to play the market: You can invest in pure-play e-bike manufacturers like Giant Bicycles or Accell Group, or companies indirectly involved in the industry, such as component makers (Shimano) or transportation as a service (Bird Global) expanding into e-bikes.
- Government support: Many governments are offering incentives for e-bike purchases and infrastructure development, further boosting the market’s potential.
Cons:
- Competition: The e-bike market is becoming increasingly crowded, with both established players and new entrants vying for market share. This can lead to price pressure and lower profit margins.
- Supply chain disruptions: The global semiconductor shortage and other supply chain challenges can impact production and availability of e-bikes, affecting company performance.
- High upfront costs: E-bikes are more expensive than traditional bikes, which could limit their adoption in certain segments and impact sales.
- Volatility: As a relatively new industry, e-bike stocks can be more volatile than established sectors, potentially leading to short-term price swings.
5 Electric Bike Stocks to Watch in 2024
Shimano (OTC:SMNNY)
Shimano is a Japanese manufacturer that makes bike components. Its bike components are a regular feature on all sorts of bicycle models from affordable to the highest-end road bikes. From brakes to cranksets, Shimano is an important parts supplier for the biking industry. Historically a slow-and-steady industrial business, Shimano’s sales have picked up the pace in recent years. Don’t expect big double-digit percentage returns, but if you’re looking for a way to bet on renewed interest in bicycles, electric bikes (e-bikes), and related outdoor equipment, this manufacturer should rank as one of the best ways to profit over time.
Peloton Interactive (NASDAQ:PTON)
Peloton is a top at-home workout company and stationary bike maker. There was arguably no bigger fitness and gym business beneficiary from the pandemic than Peloton. The at-home high-end workout equipment company picked up millions of users in 2020. Peloton has been expanding its product line to include more affordable options, including a new treadmill and a lower-priced bike. The company is also expanding internationally, which could help drive growth in the coming years.
Vista Outdoor (NYSE:VSTO)
Vista Outdoor is a manufacturer of various outdoor gear, including bike accessories. The company has a diverse portfolio of brands, including Bell, Giro, and Blackburn. Vista Outdoor has been investing in its bike business, which includes a range of products such as helmets, lights, and locks. The company is also expanding its e-bike offerings, which could help drive growth in the coming years.
Accell Group (OTC:ACGPF)
Accell Group is a Dutch conglomerate that owns multiple bike brands popular around the globe. The company’s brands include Raleigh, Haibike, and Ghost. Accell Group has been investing in its e-bike business, which includes a range of products such as city bikes, trekking bikes, and mountain bikes. The company is also expanding its e-bike offerings, which could help drive growth in the coming years.
Halfords Group (OTC:HLFD.F)
Halfords Group is a leading motoring and cycling retailer in the U.K. The company has a diverse portfolio of products, including bikes, car parts, and camping gear. Halfords Group has been investing in its e-bike business, which includes a range of products such as city bikes, trekking bikes, and mountain bikes. The company is also expanding its e-bike offerings, which could help drive growth in the coming years.
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Investing In Electric Bike Stocks – Final Thoughts
In summary, many people are considering electric bikes as a cost-effective and eco-friendly mode of transportation that can also contribute to improved overall health. With the electric bike industry expected to grow significantly in the coming years, investing in electric bike stocks could be a smart move for investors looking to capitalize on this trend.
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