More E-bike subsidy detail arises as retailers fear adverse “stall in sales”

Retailers in the cycle trade have expressed concern this week that the mooted e-Bike subsidy will actually prompt a “stall” in sales as customers hang on for a cut price ticket.

Echoing complaints made about the implementation of the Fix Your Bike Voucher scheme, the fear among cycle stores is that press headlines have already created a barrier between purchases that may have been imminent, pushing those sales further down the line and adding a layer of admin where arguably demand for bikes could have seen models sold outright.

While broadly agreeing that the scheme is not to be sniffed at, numerous retailers expressed a concern to CI.N this week on the timing of the announcement and implementation.

“Yes, it will be brilliant when and if the scheme comes in, but all this announcement which actually announces a potential for subsidies will do, is to stall e-Bike sales until the fully policy is unveiled,” said Paul Power, owner of Littlehampton Dutch Bike Shop. “Time and time again, clowns in government, who don’t have to try and sell to consumers do this. Whether it be rumour on VAT cuts, or as in this case, e-bike subsidies, can’t they see that this announcement will have a negative effect on e-bike sales?”

The concern is echoed even by national chains whose planning has apparently been influenced by the Government’s Gear Change document.

One e-Bike category manager who wished not to be named told CI.N: “My major concern is that I believe a lot of small to mid-sized retailers are going to be quite vocal around how we do not need these subsidies right now, and that the industry will not be able to keep up with the extra demand created. We saw what happened when that feedback reached the EST on the FixYourBikes scheme – they scaled back the launch and people waited several months for the next batch if they could not get a voucher.

“Phasing, or delaying the launch of this scheme will have a huge impact on the Spring trade on e-Bikes which many retailers need after a winter period,” added the source.

No reason for concern?

The talk in the trade has today prompted trade-body the Bicycle Association to reveal more on its understanding of the policy, based on discussions it has had with ministers.

Peter Eland, Technical Manager at the BA today offered: “Naturally, reporting of an e-Bike incentive scheme has already sparked major interest in the industry, along with some cautions that any such incentive scheme may exacerbate supply issues, and that premature announcement may lead to customers postponing e-bike purchases.

“However, the wording of the announcement, and the BA’s understanding following our dialogue with Government, strongly indicate that this will be a much more modest and localised scheme than some reports have suggested.

“As we understand it:

  • This will be effectively be a pilot scheme, not a full-scale national e-bike incentive scheme. It will inform how a national scheme runs in future, and especially how it could target otherwise hard-to-reach users who need incentives to benefit from e-Bike use, and who cannot access cycles through the Cycle to Work scheme.
  • This pilot will be largely based around hire schemes which target the particular user groups listed above – NOT as we understand it incentivising personal purchases by the general public at this stage.
  • These pilot schemes will be run by local authorities, who will have to pitch for the money from DfT. This means that any demand for bikes will be staggered as these bids are agreed, and will be distributed across participating local authority areas.
  • At say £250 per e-bike, the £1 million for this pilot would fund only around 4,000 e-bikes. This is unlikely to have a major impact on supply if demand is staggered and spread as above. In fact the number of bikes involved may be even lower if local authorities purchase them outright for hire purposes – it would be just 1,000 e-bikes at £1,000 each, for example.
  • We remain optimistic that a future national e-Bike incentive scheme will be introduced to further boost e-bike uptake post-COVID, funded very much more significantly, and we remain in dialogue with the DfT on this. We continue to inform officials about the industry’s supply capacity, and have made them aware of concerns about scheme timing and publicity from both retailer and supplier sides of the industry. We are optimistic that officials will take these considerations carefully into account in the development and announcement of any future national e-bike incentive scheme.”

The e-Bike subsidy scheme clarification comes on the back of fresh Government “Green Industrial Revolution” policy designed to stimulate the UK’s economy in a sustainable way. With this comes a much-reported vision to ban the sale of new petrol and diesel cars, something designed to boost the electric car trade, but that will no doubt also provide a welcome kick for cycle sales.

Norman Gauld of Planetary14Bikes said that, whatever the outcome, the winter to spring months will be crucial in many bike shop’s decisions on whether to continue to trade after a series of tough years for bicycle retail, suggesting that decisions like how the e-bike subsidy rolls out could be pivotal to the future’s of some businesses.

He concludes: “This is at a point in time when cash flow over the coming 4-5 months will dictate whether some cycle retailers will continue to trade or not. The very fact that the general public have got wind of this scheme may cause those that have already placed an order for an e-Bike (and paid a deposit) to cancel and wait for a few months to see what happens.

“I think what is needed is for our trade to lobby those that make these decisions to get a real set in stone timeline of events, otherwise end user consumers may just end up putting off in case the e-Bike subsidy scheme starts ’maybe next week’”.