High-End Electric Motorcycle Market Embraces New Opportunities

(TMTPOST)—In March 2024, Davinci Tech raised hundreds of millions of yuan in round B financing, which will be used primarily for accelerating the mass production and delivery of the company's first product, the DC100, and the construction of the second factory complex. China Renaissance has been appointed as the exclusive financial advisor for this round of financing.

At the same time, Davinci Tech signed an agreement with Zhongshan City in Guangdong province to build a new energy smart motorcycle production base in the city, laying the groundwork for subsequent model production lines. The total amount of the investment reached 1.55 billion yuan.

Previously, Davinci Tech had already established a complete intelligent manufacturing base in Zibo City in Shandong province. In addition to the vehicle assembly plant, supporting supply chain industries were also established, including motor factories, battery pack assembly plants, carbon fiber composite material factories, precision casting factories, and precision titanium alloy component factories.

On May 9, 2023, Davinci Tech's self-built factory officially obtained the qualification of a new motorcycle production enterprise from the Ministry of Industry and Information Technology. In July, the DC100 officially obtained the Ministry of Industry and Information Technology's new product access announcement and 3C certificate. In September, product deliveries officially commenced.

"Davinci Tech's positioning in the electric industry is international, facing the global market. It has accumulated extensive experience in the electric two-wheeler sector and is the only intelligent company in the large-displacement electric industry. Its modular design and robotic design are already the global leaders in the electric super high-power motorcycle industry," said Wei Qing, director of the strategic financing and M&A team of the Investment Banking Department of China Renaissance.

In February 2024, PAI Mobility announced the completion of strategic financing of hundreds of millions of yuan.

In July 2023, PAI Mobility launched the world's first intelligent electric motorcycle TS3 equipped with ADAS assisted driving technology and range extender system. Its sales increased by 200% year-on-year in 2023.

In traditional motorcycle enterprises, there is generally a high level of enthusiasm for transitioning to electric motorcycles. For instance, domestically listed company CFMOTO established its electric sub-brand ZEEHO early on. Currently, it has launched multiple high-performance electric motorcycle products such as the AE8 and AE6, adopting a strategy of "intelligence + electrification."

On the international front, LiveWire, the electric motorcycle division of Harley-Davidson, is the first listed electric motorcycle company in the United States. As a leading brand in the motorcycle industry, the BMW Group has stated that its urban travel series will be fully electrified by 2030.

With the concept of "carbon neutrality" gaining traction globally and the continuous decline in battery prices, the two-wheeler market seems to be on the eve of comprehensive electrification.

Data disclosed by ICC shows that since 2023, the price of lithium battery cells in China has been continuously decreasing. The price of square power battery cells (lithium iron phosphate) dropped from 0.82 yuan/Wh in January 2023 to 0.43 yuan/Wh in December 2023, a decrease of over 47%. The price of square power battery cells (ternary) dropped from 0.92 yuan/Wh in January 2023 to 0.52 yuan/Wh in December 2023, a decline of over 43%.

The two-wheeled electric vehicle market has long been dominated by cheaper E-bikes (electric bicycles) and E-scooters (electric scooters). According to data from the market research firm MarketsandMarkets, as of the end of 2022, the global electric bicycle (E-bike) market was worth $49.2 billion, with a total shipment of 51.25 million units.

Due to its high cost and slow price decline, the E-motor has always occupied a relatively niche position. According to statistics and forecasts by QYResearch, the global high-performance electric motorcycle market sales reached $463 million in 2022. Assuming an average price of $2000 for high-performance electric motorcycles, the global sales of high-performance electric motorcycles are estimated to be around 200,000 units.

Li Yan, CEO of Niu Technologies, once said that the battery cost of Niu's two-wheeled electric products accounts for 70% of the total vehicle cost at its peak price. Currently, with lithium battery prices dropping to one-sixth of their peak, the complete vehicle price of high-performance electric motorcycles may one day be halved.

Liu Feng, an investor in the mobility sector, said that the investment value of electric motorcycles largely comes from uncertainty. "An electric motorcycle priced at 20,000 yuan may be criticized as a 'big electric donkey,' but who knows what the result will be for an electric motorcycle priced at 10,000 yuan?"

Considering that the global sales of motorcycles are approximately 50 million units annually, high-performance electric motorcycles with sales of only 200,000 units have huge growth potential. Market Research Future analysis predicts that by 2027, the global electric motorcycle market will reach $58.37 billion, with a compound annual growth rate (CAGR) of approximately 12%.

Liu Ping, co-founder and COO of Horwin, believes that by 2027, China's electric motorcycle penetration rate will rise from the current 20% to 50%, and overseas markets will also increase to 20%-30% in the coming years.

Li said that over time, as battery costs decline, electric motorcycles will return to their role as commuting tools. "The inflection point of lithium battery prices marks the beginning of the rise in the penetration rate of domestic electric motorcycles."

In addition to the growth opportunities brought about by the decline in battery costs, the new energy vehicle industry chain has also paved the way for the popularization of electric motorcycles. According to FELO, 70% of the parts of its FELO electric scooter come from the new energy vehicle industry system. Wu Daoxian, founder of the intelligent electric drive business "Red Rabbit Drive," once noted that the electrification dividend in the automotive field is trickling down to the ebike and electric motorcycle fields, and eventually, there will be "new forces" like Tesla.

Investor Liu Feng said that a new "Tesla" may emerge in the electric motorcycle field in the next few years. In terms of technology, there are many technologies from new energy vehicles that can be directly applied. Due to the decline in battery costs, there is more operational space for the entire vehicle, and the growth prospect in the next few years is very promising.

"China's new energy vehicle market penetration rate has increased from 5% to 35% in just four years. Who would have seen that coming four years ago?" Liu commented.