Infrastructure and Business Model Are Key to Market Breakthrough for Smart E-Scooters, Says TrendForce

Chinese and Taiwanese tech companies are currently making an impact on the electric scooter (e-scooter) market. Taiwan-based e-scooter manufacturer Gogoro received much praise for its Smartscooter at this year’s International CES. Since its reveal, the Smartscooter has captured the public’s attention with its innovative design, use of smart technologies and distinct business model. China-based rival manufacturer Niu on the other hand has launched its N1 e-scooter with the help of electronics giant Panasonic and global auto part supplier Bosch. 

“Chinese and Taiwanese e-scooter companies are currently rolling out competing products that feature smart technologies,” said Eric Chang, analyst for Topology Research Institute (TRI), a division of TrendForce. “In order to achieve concrete results in the market, they must also expand the supporting infrastructures and create viable business models.” 

According to Chang, Taiwan’s e-scooter market is still at its infancy, and e-scooters’ high unit prices discourage consumers from buying them. The government has addressed this issue by introducing subsidy programs to encourage the adoption of e-scooters on the island. Moreover, measures by the local governments, such as additional financial assistance and quota scheme, have been instrumental to increasing sales figures in cities and counties. 

China, on the other hand, has a very fragmented market. A standard for e-scooters have yet to be specified in the country and the differentiation between e-scooter and e-bike (electric bicycle) is rather vague. The existing Chinese manufacturers currently have a dominant position in the domestic market as the Chinese government has attempted to consolidate the industry by setting up entry barriers. Thus, the remaining domestic e-scooter makers all have a solid foundation. While China’s e-scooter market is vast, Taiwanese companies may find themselves entering the scene a bit too late. 

“Smart technologies offer an opportunity for e-scooter companies to achieve a market breakthrough,” said Chang, “so Chinese and Taiwanese companies share the same ambition of developing a product that attracts consumers with new application services.” 

Before smart e-scooters can take off in sales, there are two challenges ahead for manufacturers besides adding attention-grabbing features to their respective products. 

The first challenge involves the massive expansion of the battery-swap station network, and installing these stations also requires additional planning within the realm of public infrastructure. Gogoro, for instance, has a long way to go in terms of achieving the target of at least one station per 2.5 square kilometers within a densely populated area. 

The second one is to find the right pricing strategy and business model. During the initial phase of the product launch, e-scooter companies can consider creating a rental program that allows users to rent a scooter at one location and drop it off at another. This would cultivate product adoption among consumers. At the same time, the customer feedback from the rental program will help manufacturers build their next-generation products.