January 11, 2022
Crain’s Detroit Business
Jan. 7, 2022
In the automotive industry’s mad dash to make the smartest electric car, Bosch Group is also tinkering with a different set of wheels.
The largest automotive supplier in the world, whose North American base is in Farmington Hills, sees a big opportunity in e-bikes, once a niche segment that is now booming across the globe.
Executives say the company is tapping into its automotive expertise in pursuit of dominating the space and becoming the Tesla of e-bikes, as it were. Launched in 2009 as a company startup, e-bikes have become a significant and growing segment of Bosch’s mobility division.
“What’s interesting is the parallels to the passenger car mobility segment,” said Tim Frasier, regional president of the company’s Cross-Domain Computing Solutions, North America. “The strength of Bosch is our design and technical competence, but the important part is we take what we have within one domain, specifically in automotive, and we’ve used that to support other means of mobility.”
As with cars, the next frontier for e-bikes is connectivity. That theme was on full display this week during the CES technology show in Las Vegas. While Detroit-based General Motors Co. unveiled the anticipated Chevy Silverado EV and other automakers touted their latest EV technology, Bosch went for a bike ride.
The supplier, typically associated with car parts and power tools, used the stage to take its new eBike Smart System for a spin. Bosch’s e-bike system consists of an electric drive unit, battery and display installed on bicycles of all different types and brands. Trek is its largest customer, and cargo and delivery bikes are its fastest-growing category.
The concept of e-bikes has evolved from slapping a bulky motor onto a bike frame into sleek, modular designs for commercial and recreational use. E-bikes, along with electric scooters, have become an increasingly popular form of mobility that has sprouted countless startups and inspired serious R&D investment by major automakers from GM to Volkswagen.
“It was not a sexy product, it was not integrated (and) it looked horrible,” Claudia Wasko, general manager for Bosch eBike Systems, Americas, said of the earliest e-bike iterations. “What happened over time … the drive unit became much smaller, the battery became integrated, you cannot see it any longer. Every kind of category got electrified.
“Everybody’s riding e-bikes. It’s cool.”
The global market size for e-bikes hit nearly $17 billion in 2020 and is expected to grow to $52 billion by 2028, according to market research firm Fortune Business Insights. While Europe remains the largest market for e-bikes, sales have surged in the U.S. to more than half a million units in 2020.
Wasko said Bosch is among the global market leaders of proprietary e-bike systems, with more than 100 customers globally, including Trek, Cannondale, and Scott Sports. She said Bosch has more than 20 percent market share in North America and is the dominant e-bike company in the core markets of Switzerland and Germany, where Bosch keeps its global headquarters.
The company declined to disclose revenue, percentages, or number of employees for its eBike Systems unit, which is part of its metro Detroit-based Mobility Solutions business. Research and development of eBikes are done primarily in Germany, with administrative and sales work in California and assembly in Hungary.
Unlike a decade ago, Bosch has lots of company as the e-bike space has become cluttered with competitors. There are hundreds of e-bike companies around the world, from well-known brands such as Jeep and Yamaha to dozens of startups, many of which fold before getting off the ground.
Even big automakers have had varied success on two wheels. GM launched its Ariv e-bike in mid-2019 before pulling the plug less than a year later due to the downturn of business caused by the COVID-19 pandemic, according to the company.
Bosch said it aims to differentiate itself by offering riders continuous customizability.
“What’s now really new to this generation is the connectivity, so we are adding a digital layer,” Wasko said. “We are merging the physical experience of riding an e-bike with various digital conveniences, like personalization, like connectivity, like services.”
The newest generation of Bosch-equipped e-bike — launching in the U.S. and abroad starting at $2,000 to as high as $13,000 — centers on the eBike Flow mobile app connected to the bike via Bluetooth. It allows users to adjust and save settings such as torque, maximum speed and assistance. Like a smartphone, the bike can be updated over the air.
“That makes the system smart because it will continually evolve after the purchase,” Wasko said.
Another new feature is the anti-theft system. If someone tries to steal the bike, its motor will turn off, an alarm will sound and a notification will be sent to the owner through the app, which also tracks the bike’s location.
Among features being tested for potential future application is a safety system being developed by Royal Oak-based software company Tome in partnership with Bosch, Ford Motor Co., GM, and other automotive companies.
The software, in development for the past five years, is an AI-based Bicycle to Vehicle (B2V) communication system that aims to keep cyclists safer by being visible to a car even when its driver doesn’t see them, said Jake Sigal, founder and chief executive officer of Tome. Sigal was among Crain’s 50 Names to Know in Information Technology in 2016.
“The technology is based on the existing wireless messages that a vehicle can send to other vehicles or infrastructure — called basic safety messages and personal safety messages,” Sigal said. “That’s the work that Bosch has been involved in with Tome … is figuring out what the requirements are of these messages. It’s very technical in nature.”
Bosch and Tome are hopeful the federal government’s recent focus on alternate forms of mobility will boost sales and safety. Though stalled in Congress, President Joe Biden’s Build Back Better bill includes a proposed $4.1 billion for e-bike tax credits, and the recently passed bipartisan infrastructure bill includes grant funding for beaconing, similar to the car-to-pedestrian technology being developed by Tome.
“One of the barriers to buying an e-bike is, of course, it’s still a huge investment,” Wasko said. “We really think that we have to further proliferate e-bikes here in the U.S.”