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Welcome to Flywheel, a weekly exploration of owned and used micromobility. Each newsletter will highlight an observation of trends emerging in the industry and feature some of the most interesting vehicles/hardware in micromobility.

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The observation of the week features some of my key takeaways and learnings from attending the Micromobility America 2024 conference. This week’s featured vehicles are a longtail cargo bike, an emoped, and a commercial bakfiet.

Observation of the Week

Takeaways from Micromobility America 2024

A few weeks ago, I had the privilege of attending the annual Micromobility America expo in Costa Mesa, CA. It was awesome to be amongst others in the industry, meet several of you all IRL, and get a sense for how the MM community thinks about the challenges it’s facing today and the direction it’s moving in tomorrow. Here are some of my key takeaways and learnings from the conference:

Shared micromobility is making a quiet resurgence

For a long time, the discourse around shared micromobility focused on the challenges of fleets struggling to make their unit economics work and operate profitably. During the era where there were seemingly a dozen fleets all vying for the same few limited permits from cities and traction expectations were sky high due to pricey fundraising valuations, many operators were forced into a grow-at-all-costs mode that simply wasn’t sustainable. We’ve seen many stalwarts of the space file for bankruptcy, consolidate with competitors, take sub-optimal acquisitions, and generally just struggle to stay in business.

Shared micromobility is a hard business to make work. It’s a largely commoditized service built upon relatively commoditized vehicles, and as such requires an extremely high level of operational excellence and discipline for success. As the glaring eye of the world shifted away from shared MM over the last few years and companies have had more leeway to be patient and diligent, we’ve started to see a slow resurgence of the space and several operators are starting to thrive.

Lime reported EBITDA profitability in 2022 and 2023, ridership of Bay Wheels reached all time highs in 2024, and there are many smaller SMB operators around the world quietly running sustainably profitable businesses. As McKinsey Partner Kersten Heineke reported during his talk at the conference, shared ridership by the end of this year is expected to exceed pre-pandemic levels.

Shared micromobility is a public good for cities, and it’s important that city officials realize that shared MM services need the same kinds of subsidization, or at the least regulatory support, as other forms of public good transportation services like public transit. Gone are the days where a dozen operators can afford to undercut each other on price and operate at a loss simply to win a city permit. To that point, Heineke via the Zag Daily presented some interesting projections about how shared ridership will evolve with and without city support. Under McKinsey’s Base Case where cities choose not to subsidize/actively support shared MM, McKinsey expects shared MM trips to grow to 190M by 2030 and 260M by 2035. Under McKinsey’s Upper Case where cities do subsidize/actively support shared MM, McKinsey expects shared MM trips to grow to 400M by 2030 and 540M by 2035.

One interesting tidbit from the aforementioned McKinsey research is that the pendulum in shared MM has swung from shared scooters to shared bikes. In 2023 where there were 136M shared MM trips, 68M trips were using shared bikes while 65M trips were using shared scooters. This was the second consecutive year where we’ve seen this split.

Two notable companies to keep an eye out for in this space are Drop and Joyride. For cities actively invested in integrating shared MM into the fabric of their public transportation services, Drop offers shared micromobility fleets in a box (vehicles, docks, operations software, and servicing) that cities can use to easily operate shared services on their own. Joyride offers off-the-shelf connectivity, rider app, and ops software so that fleets don’t need to reinvent the wheel and can focus on the operations and execution core to their business.

Volume wins the game - How Lectric is running away from the rest of the pack

Lectric has quickly dominated the US ebike market, and they’re the fastest growing ebike OEM in the US. They’ve already sold over 400K vehicles in their short ~4yr history, and their flagship XP vehicle is "the third most popular EV in America behind only the Tesla Model 3 and Model Y.” As Electrek’s Micah Toll aptly puts it, “It’s really starting to feel like all the other e-bike companies are just fighting for second place, doesn’t it?”

What’s made Lectric so popular is the level of functionality and utility they provide at astoundingly low prices. Time and time again, Lectric manages to integrate components that were once deemed too premium for affordable ebikes onto vehicles that retail for ~$1K-$1.5K. Whether it's hydraulic disc brakes, UL-certification, or even a torque sensor, Lectric was the first OEM to bring them to budget ebikes at scale.

I had a chance to chat with Lectric’s Co-Founder and Chief Innovation Officer Rob Deziel at the conference, and his answer to how Lectric manages to do what they do was elegantly simple: it’s all just a matter of volume and giving customers what they want.

When Lectric first started out, their hypothesis was that the main things US customers want in an ebike is affordability and reliability. So that’s exactly what their first vehicles were designed for: no bells and whistles, just cheap vehicles that lasted on the road. This approach allowed them to reach the mass volume that they operate at now, and this volume has unlocked leverage with suppliers to buy premium components at lower prices and the economies of scale required to lower BOM costs and assemble bikes with high-end functionality at budget prices. Now when Lectric brings a new ebike (i.e. the XPedition 2.0) to market that has a torque sensor, hydraulic disc brakes, a great maintenance network, and is UL-certified all for a sub $1,500 MSRP, they blow every other ebike in that price bracket out of the water. Competing OEMs in this price range don’t have the volume or scale to be able to offer both this level of functionality and price, so they have to resort to offering low prices with low functionality or high functionality but significantly higher prices. Sure, Lectric ebikes aren’t as silky and smooth as more expensive ebikes from incumbent Bosch-powertrain OEMs, but that’s not the market Lectric is competing in. Lectric’s ebikes are perfect for the everyday utility-focused rider, and their vehicles get the job done.

The approach is simple, but Lectric’s laser focus on what consumers want and precise execution around their supply chain and manufacturing has allowed them to run away from the rest of the market. Looking back at this recent era of micromobility startups and new vehicle OEMs, it’s clear that Lectric is one of the few true winners in the space despite not being as flashy as the rest. If they’re not already, I suspect they’ll soon become the best selling ebike OEM in the US and one of the most important companies in the industry advancing micromobility adoption.

Tariffs and uncertainty around the regulatory/policy landscape

Given the upcoming changes in the US federal administration, there’s a lot of talk and uncertainty around how the regulatory and policy landscape for micromobility in the US will change in the coming 4 years. While the actual policy changes that may happen are hard to predict, one thing that seems almost certain is an increase in tariffs for imported goods, particularly for those imported from China.

Tariffs are arguably the policy change that will have the greatest impact on LEVs. 97% of bike and scooter parts come from overseas suppliers, with a majority of those components coming from Chinese suppliers. An increase in tariffs on those components will result in increased BOM costs across the board for all LEV manufacturers, and those increased costs will likely be reflected in increased retail prices for consumers.

Tariffs aren’t new to the bike industry. In fact, the combination of existing tariffs and inflation is one of the main reasons why LEV retail prices have gone up in the past few years. To combat this, Rep. Earl Blumenauer (D-OR) introduced the Domestic Bicycle Production Act to the House Ways and Means Committee this past June. The bill is designed to 1) suspend tariffs for 10 years on bike parts, 2) provide tax credits for OEMs manufacturing bikes in the US, and 3) provide low interest 12-year loans for OEMs to set up domestic manufacturing infrastructure. This bill is yet to pass through Congress, and much of the industry is anxiously hoping that it goes through in order to give manufacturers the support and time needed to bring their supply chains back to the US.

Regardless of whether the bill passes or not, there’s thankfully already been a concerted effort over the last few years across all hardware industries to onshore manufacturing and supply chains. There’s now a burgeoning domestic manufacturing ecosystem for batteries, vehicle components, and others that OEMs are already starting to tap into. One startup to keep an eye out for that’s aiming to make accessing this ecosystem easier is Detroit-based Bloom. Bloom acts as a marketplace for LEV OEMs to find ways to outsource their backend and focus on core product and customer experience design. They have a network of vetted US-based service partners that can help OEMs with everything from manufacturing, distribution, shipping/logistics, and servicing. By aggregating the longtail of LEV OEMs operating at low-to-medium volumes, Bloom is hoping to bring affordable backend services to the industry at a cost that’s normally only available to the high-volume players. Bloom already has 30+ customers, including a resurrection attempt of Cake, Dust Moto, Drop, Vela, and others.

Given the higher prices that we’ll likely see with increased tariffs and the long transition period of onshoring manufacturing, I think we’ll see a wave of less diverse vehicles/vehicle technology and a continued consolidation of brands.

Another uncertainty that accompanies the upcoming federal administration change is around the money that’s been earmarked for MM infrastructure, subsidies, etc. While changes to this kind of policy are hard to predict, one important thing to note is that, as per Debs Schrimmer (Senior Advisor at the US Joint Office of Energy and Transportation), much of this kind of support is already set and planned for well beyond 2025. Additionally, things like ebike tax rebates/subsidies are funded at the city, county, or state level and will likely remain due to their insane popularity locally. Denver, for example, has given out close to 15K vouchers since 2022, and rebate programs in many cities around the US frequently run out just minutes after being posted. It’s unlikely that these types of programs are repealed anytime soon.

Battery safety - UL-certification requirements are inevitable

Ebike battery fires have reached a tipping point over the past two years, and many cities have begun efforts to find ways to mitigate the safety concerns around LEV Lithium batteries. NYC, one of the cities leading a regulatory push around this topic, passed Initiative 663-A which requires all LEVs sold, leased, or distributed in NYC to be UL-2849 certified, and many of the property owners in NYC are banning the storage of any LEV in their buildings due to fear of fire. The rest of the country has taken note of these actions, but it’s unclear how long it will take for other cities to enact similar laws given some of the pushback due to the costs associated with getting vehicles UL-certified.

In parallel, it seems like the insurance industry will do its best to push the market towards UL requirements as soon as possible. Insurance for vehicle manufacturers and and landlords as it pertains to micromobility traditionally saw bodily injury as the main risk and claim. However, given the dangerous and hard-to-fight nature of Lithium-battery fires, property damage is quickly becoming a major claim issue and cost for insurers. As Brandon Schuh, Head of Specialty Insurance at the Christensen Group, pointed out during a battery safety roadmap panel at the MM America conference, the insurance rates for massive multi-tenant skyscrapers/buildings can go up significantly even if just one tenant is storing LEVs in their home or business.

Insurers are already starting shirk away from insuring LEVs due to the risks around battery fires, and it’s unlikely that insurance providers will provide plans moving forward without baking in UL-certification mandates. Additionally, as more leasing and financing options that are traditionally tied to insurance and residual value start to become available for LEVs, these UL requirements from the private sector will likely only become more prevalent.

UL-certification is still a relatively expensive process for OEMs, and it’s unfortunate that those costs are often transferred onto the consumer. However, the standardization of battery safety specs is a must for LEVs to become safer to use, and the industry is slowly making changes to make the UL-certification process simpler and more affordable. Check out this Flywheel interview with Shyam Srinivasan @ Zitara for more on that topic.

Shoutout to the crew at Micromobility Industries for once again hosting an awesome event. I look forward to attending again next year :)

For more observations and resources on owned and used micromobility, check out rideflywheel.com/resources.

Featured Vehicles of the Week

1. Lectric XPedition 2.0 | $1,399

Launched earlier this month, the Lectric XPedition 2.0 is a class-2/class-3 longtail cargo bike and the second generation of Lectric’s highly popular cargo bike line that was debuted just last year. While much of the ebike industry has been raising retail prices of their vehicles due to tariffs, component shortages, inflation, etc., Lectric has somehow managed to bring major upgrades to the XPedition 2.0 while still maintaining the same retail price as its predecessor. It’s yet another example of what Lectric does so well, providing an unbeatable combination of performance and value. The XPedition 2.0’s powertrain features Lectric’s custom M24 85Nm rear hub motor and a 624Wh battery pack, and there’s even two larger battery pack configurations (1248Wh or 1680Wh) for ultra-commuters or commercial fleet operators. The ebike system is UL-2849 certified, and the battery packs are UL-2271 certified. While there’s a whole suite of new features that Lectric brought to the XPedition 2.0, the most notable inclusion is a torque sensor. Also custom designed by Lectric, the torque sensor gives the XPedition 2.0 highly responsive pedal assistance and offers a more leisure riding alternative to the throttle that all Lectrics have. Other major upgrades include a longer and stiffer frame/rear rack, a 450lbs payload capacity, a wider kickstand, narrower 20” by 2.5” tires for better agility, a suspension fork, improved brakes, an 8-speed Shimano transmission, and new turn signals. The XPedition 2.0 is currently available for pre-order on Lectric’s website with a ~$300 discount and comes with comes with several hundred dollars worth of accessories (i.e. rear cushions, running boards, headlights, suspension seat post, rear fence cage). Shipping is expected to begin in January 2025. Listing can be found here.

2. Cake Makka Flex | $2,500 | NYC

The Cake Makka Flex is a utility-focused emoped with a distinct “Ikea-chic” industrial design. As the most affordable and agile option from Swedish manufacturer Cake, it’s tailored for urban commuters seeking practicality without sacrificing modern aesthetics. Its powertrain features a 60Nm rear hub motor and a 1.5kWh removable battery, and is capable of regenerative braking and a top speed of 28 mph. Unlike many scrambler-style ebikes, the Makka Flex forgoes pedals altogether and operates exclusively via throttle. This classifies it as a “motor-driven cycle,” which requires a driver’s license in most US states. For riders looking for a license-free option, Cake also offers the Makka Range which is capped at 15 mph and is legally classified as an escooter. A :work edition is also available for commercial use, which features reinforced carriers and extended range to handle heavier cargo. True to Cake’s ethos, the Makka is highly modular, boasting multiple mounting points for accessories like passenger seats, cargo boxes, and windshields. At a weight of 154 lbs and a wheelbase length of 47.64”, the Makka Flex is larger than most scrambler ebikes. While this can be inconvenient for storage, the larger body gives it a sturdier and stabler feel at higher speeds. Its dual suspension and robust motorcycle-grade tires further enhance this comfort and stability. Most of the vehicle’s tech is centralized in the CAKE Connect App, which enables performance tuning, anti-theft tracking, remote diagnostics, and maintenance reminders. CAKE was one of the earliest new-age OEMs in the world of micromobility, and their eye-catching designs and unique applications (i.e. bikes for anti-poaching and wildlife conservation) captured the imaginations of many of the industry’s earliest adopters. However, the company never managed to find a sustainable scale and had to file for bankruptcy in February 2024. It was acquired by Brages Holding AS shortly thereafter, but Brages’s plans for the brand are still in development. All that said, the Cake Makka is still one of my favorite ebikes in terms of design and rideability, so this listing for a Makka in like-new condition (Flywheel estimated mileage of 261.85mi) is a great opportunity to get your hands on a piece of micromobility history. It’s being resold because the current owner is moving. Listing can be found here.

3. Urban Arow Cargo | $6,000 | NYC

The Urban Arrow Cargo is a class-3 bakfiet designed for commercial use. Urban Arrow is a well-known cargo bike OEM best known for their front-loaded bakfiet ebikes. Their most popular model is the Family, a kid-hauler used by families as a minivan replacement. That being said, Urban Arrow actually also has a thriving B2B business and sells two models called the Cargo and the Tender that are used as fleet vehicles for urban tasks by thousands of businesses around the world (most notably German logistics carrier DHL). The Cargo is a more nimble B2B commercial offering and has a payload capacity of 250kgs, while the stronger Tender has a staggering 300kgs payload capacity. As outlined here, both models can be configured for many different use-cases and fleets can customize their vehicles with different accessories, powertrains, etc. based on their needs. The Cargo is their most common commercial offering. Its powertrain features an 85Nm Bosch Performance Line CX mid-drive motor and a 500Wh Bosch PowerPack. Although the Urban Arrow Cargo is heavy, long, often loaded to the brim, and only has 2 wheels, it’s actually surprisingly stable and agile. Its front wheel is smaller than its back wheel to allow for more nimble steering, and its Enviolo Heavy Duty continuously variable transmission and Gates Carbon Belt Drive make accelerating/decelerating the Cargo easy and efficient. Urban Arrow shares the same parent company as many other common brands like Gazelle and Kalkhoff, so that plus the fact that it uses Bosch powertrains gives it access to a massive maintenance and dealer network. Urban Arrows are easily the highest quality and most reliable bakfiets in the market. They may seem intimidating to ride at first, but they’re safe and easy-to-use ebike pickup trucks. This listing is a retired fleet vehicle from NYC-based cargo and family bike rental company Queens Bike Share. It’s in almost brand-new condition with only 77.2mi on its odometer and comes with the ~$1,400 Urban Arrow Flight Case removable cargo box. Listing can be found here.

That’s it for this edition. Thanks again for joining, see you next week!

- Puneeth Meruva