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European E-bicycle Market Continues to Boom: Sharp Increase in EU Imports of E-bicycles Will Likely Lead to Anti-dumping and Anti-subsidy Investigations Against Mainland China

Over the last five years, imports of electric bicycles (e-bicycles) into the EU have risen sharply, underlining the growing popularity of such bicycles. This conclusion was reached on the basis of the import statistics published by Eurostat during the European Mobility Week, which was held between 16 and 22 September 2017.

The import of e-bicycles into the EU has been tracked by specific codes in the Combined Nomenclature (CN) of the EU since 1 January 2012. The CN codes are of importance because they track all imports into the EU and determine the amount of payment of all import, dumping, and circumvention duties.

When analysing the import statistics, a distinction should be made between the importation of the 250 Watt – 25 km/hour category of e-bicycles (regular e-bicycles) on the one hand, and the importation of e-bicycles exceeding 250 Watt (speed e-bicycles) on the other hand. Indeed, between 2012 and 2017, e-bicycles were classified under two separate CN codes: 8711 90 10 and 8711 90 90. While regular e-bicycles were classified under the former (“Cycles, with an auxiliary electric motor with a continuous rated power not exceeding 250 watts”), speed e-bicycles were classified under the latter (“Other”).

During 2016, nearly 1.2 million regular e-bicycles were imported into the EU from non-EU countries. When comparing this figure to the total imports of regular e-bicycles into the EU from non-EU countries in 2015 (approximately 726,000 units), an increase of more than 60% is observed. The average price of regular e-bicycles dropped by 7.9%, i.e., from 396 EUR in 2015 to 365 EUR in 2016.

Table: Total imports of regular e-bicycles into the EU from non-EU countries
Table: Total imports of regular e-bicycles into the EU from non-EU countries

Mainland China, exporting a total of 932,043 units to the EU and thus representing 79% of all imports of regular e-bicycles from outside the EU, was by far the main country of origin. This market leader was followed by Vietnam (91,468 units; 8%), Taiwan (79,316 units; 7%), Hong Kong (36,932 units; 3%) and Switzerland (30,265 units; 2.5%). Indeed, while Hong Kong exported 37,854 regular e-bicycles to the EU in 2015, this figure slightly decreased in 2016, during which Hong Kong exported 36,932 regular e-bicycles to the EU.

Table: Exports of regular e-bicycles to the EU during 2015 and 2016
Table: Exports of regular e-bicycles to the EU during 2015 and 2016

Together with the sharp increase of imports of regular e-bicycles into the EU, a significant 10% drop of EU imports of regular (non-electric) bicycles has been observed in 2016. During 2016, an all-time low of 6.7 million regular bicycles were imported into the EU. This drop appears to be linked, at least in part, to the growing popularity of e-bicycles.

Several EU Member States (e.g. France) have incentivized this trend by setting up a subsidy scheme for the purchase of e-bicycles.

With regard to the importation of speed e-bicycles into the EU, the Eurostat statistics for the first nine months of 2016 are alarming. According to the EU manufacturers, they could appear to indicate the possibility of fraudulent practices, in particular with regard to speed e-bicycles from mainland China. Indeed, the total amount of imports of speed e-bicycles increased by more than 350%, with imports from mainland China increasing by 450%. The more than tripled import of speed e-bicycles into the EU is not reflected by any 2016 market trend in Europe, according to the EU manufacturers. Moreover, the average value per imported speed e-bicycle, which declined by more than 60%, also presents anomalies.

Table: Total imports of speed e-bicycles into the EU from non-EU Member States
Table: Total imports of speed e-bicycles into the EU from non-EU Member States

 

Table: Exports of speed e-bicycles to the EU
Table: Exports of speed e-bicycles to the EU

These figures could be explained by that fact that e-bicycles are subject to import duties of 6% upon entry in the EU, while regular bicycles are subject to import duties of 14%. Moreover, regular bicycles from mainland China are subject to EU anti-dumping duties amounting to up to 48.5%. These anti-dumping duties do not apply to e-bicycles. This could, arguably, make it attractive to export regular bicycles under the heading of e-bicycles.

In relation thereof, Hong Kong exporters should note that the CN codes for e-bicycles have changed since 1 January 2017. As of 1 January 2017, the new 6-digit code 8711 60 was introduced for cycles “with electric motor for propulsion”. It follows that regular e-bicycles now fall under CN code 8711 60 10 (“Bicycles, tricycles and quadricycles, with pedal assistance, with an auxiliary electric motor with a continuous rated power not exceeding 250 watts”), while speed e-bicycles fall under CN code 8711 60 90 (“Other”).

Furthermore, as reported on 2 October 2017, the sharp increase in EU imports of both regular and speed e-bicycles from mainland China could, it is understood, lead to anti-dumping and anti-subsidy investigations.

The European Bicycle Manufacturers Association filed its anti-dumping complaint in early September 2017, targeting Chinese e-bicycle producers such as Fuji-Ta, Geoby and Tiajin Goldenwheel. The European Commission now has until late October to decide whether or not to initiate an anti-dumping investigation. This investigation, which would likely include pedal-assisted electric city bikes and electric mountain bikes with lithium batteries, could be one of the EU’s biggest trade defence cases, worth up to 400 million euros.

EU sales of e-bicycles, which amount to around 2 million units a year, are projected to increase to 5 million annually over the next five years. European e-bicycle producers fear that without trade defence measures, the growing market will be cornered by cheaper models from mainland China. EU producers have invested heavily in the sector to push innovation in green technology – approximately 1 billion EUR is said to have been invested by EU producers in the last year – but they claim that the increase in the Chinese market share is making it more difficult for EU producers to remain at the cutting edge. It appears that the EU market share has gone down from 74% in 2014 to 61.9% in 2016. The European bike industry, for both normal and electric bicycles, is said to account for 90,000 jobs in Europe.

In addition, the anti-dumping investigation, if initiated, is likely to be followed by a request for an anti-subsidy investigation by the end of 2017, which is currently being prepared by the European Bicycle Manufacturers Association. This investigation would also include pedal-assisted electric city bikes and electric mountain bikes with lithium batteries. According to the European industry, companies from mainland China are benefiting from state aid, including but not limited to forms of cheap loans and grants, subsidies linked to high technological development, and free patent protection, which is felt to be a big cost for European producers.

The European Bicycle Manufacturers Association will also be asking the European Commission to impose registration on imports of e-bicycles from mainland China from the start of the investigation (if initiated), which would allow EU investigators to retroactively impose duties from the moment of registration.

Content provided by Picture: HKTDC Research
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