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Many people speak about the future of electric vehicles (EVs), often focusing the conversation on electric cars. However, what about the micromobility market?
Micromobility is a category of transport encompassing small, lightweight vehicles such as e-bikes, electric scooters, bicycles and similar vehicles (e.g. electric skateboards and wheelchairs). These might be owned outright by consumers or rented from companies or councils, such as the famous “Boris Bikes”.
According to some analysts, micromobility is set for an inevitable rise in the coming years. Below, we explore the reasons behind this trend and some possible implications for investors.
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Micromobility in the UK: an overview
According to popular definition, micromobility vehicles are typically portable (e.g. can be carried by an able-bodied person) and are limited to about 15 miles per hour (25 km/h). This makes them ideal for commuting within 10 km range – e.g. intra-city travel.
There are approximately 20 million bicycles in the UK, along with over 1 million e-scooters (with the highest concentration in London). 1 in 20 people own an e-bike.
Around 18,000 electric scooters are available for short-term hire in the UK. 12 companies operate in 51 towns and cities. Voi dominates the market with 10,000 scooters.
Although our minds may drift to European cities like Amsterdam when thinking about scooter use by area, Asian countries like China and India account for 90% of all global two-wheeler sales. As the middle classes keep growing in these countries, sales are likely to go up further.
Why is micromobility on the rise?
According to James Gross, Co-Founder and CEO of Micromobility Industries, there could be “Twice as many micromobility vehicles on the road as cars in the near future”.
This is partly because the number of cars, worldwide, could be approaching critical mass. Roads can only support so many automobiles before congestion (and pollution) become too much for residents, tourists and commuters to bear. Micromobility can offer a solution.
Increasingly, consumers are recognising the benefits. In many areas (e.g. London), micromobility is often more affordable than traditional modes of transportation, such as a petrol-powered car. They also offer a mode of travel which is relatively fast, quite physically active and low in carbon emissions.
Global e-bike sales are on the rise at a 20% compounding annual growth rate. The markets for e-scooters and other electric vehicles are also growing. Projections of car sales, by comparison, are very low. The latter is not helped by rising costs (e.g. due to supply chain issues).
Looking ahead and implications for investors
At present, one of the biggest barriers to the greater adoption of micromobility solutions is government regulation. In 2023, many micromobility vehicles are still not legal on public roads, pavements or cycle lanes in the UK.
This is partly because e-scooters fall under the definition of “powered transporter” under the Road Traffic Act 1988. This means that they are covered by the same laws and regulations that apply to all motor vehicles, such as technical safety standards.
Currently, e-scooters on the market cannot do this. However, the UK government appears to be shifting in favour of changing the law. New technologies are blurring old distinctions about longstanding vehicle definitions, and popular (voter) demand is on the rise.
At present, trials are being run in 31 regions where it’s legal to use rental scooters on public roads and in cycle lanes (not motorways). There are good reasons to believe that the eventual outcome of these trials is that e-scooters will be able to use UK cycle lanes.
The UK will likely be keen to attract micromobility investment into the country, given that the global market is valued at £37 billion in 2020 – expected to reach over £169 billion by 2030. These vehicles also provide another useful string in the bow to meet national net-zero targets.
Key players in the market include Beam Mobility Holdings, Bird, Electricfeel, Dott, Lime, Neuron Mobility, VOI, Yulu, Zagster and Floatility GmbH. Many of these companies are based overseas and the UK government would do well to make them feel welcome.
Changing UK demographics are expected to be a net positive driver behind micromobility growth. Millennials and Gen Z – now the prime working-age population – hold favourable views of these solutions and are adopting them in increasing numbers.
Increasing worldwide urbanisation is also expected to be a tailwind, since cars are expensive and cumbersome to own in cities compared to micromobility options. Around one-third of the worldwide population lived in urban areas in 1950. By 2050, this will rise to around two-thirds.
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