The Core Fundamentals of E2Ws
Is there space for E2Ws in the world?
READING TIME: 17 min
For a research hub specialising in E2Ws, this is a rather difficult statement to start the discourse with.
What does this edition explore?
This edition of InsightEV explores the ‘Core Fundamentals’ of urban electric mobility. We investigate the space for E2Ws in the world and wonder if there is any at all.
We also discuss three recent failures resets - CAKE, ARC and UNU - and analyse how deviating from the core fundamentals has been the primary reason for failure.
And what can the industry learn from them…because every reset should be a new beg.
E2Ws in an ICE world
The world has been moving to electric two-wheelers. The penetration keeps on increasing every passing year and as we look around we start appreciating the reasons for their growing popularity. They are simple, have far fewer mechanical components, hold the promise of low maintenance and reduce the global reliance on fossil fuels. Extrapolate all of these to infinity and E2Ws may be one of the biggest factors why we would have fewer wars in the future.
The factors change across geographies, product categories, and use cases but we can silo them under two broad shoulders:
They are cost-efficient…If the business model can be sliced correctly.
E2Ws are fun…within some constraints
In both of the above cases, E2Ws are not absolute and that is why we added a …disclaimer to both statements.
Over the last 125 years, ICE2Ws have defined the rules of 2W mobility and the users are habitual of products that behave in a certain way. From seat height to suspension travel, and from wheelbase length to torque, ICE2Ws have meticulously defined what two-wheelers in different use cases ought to be and should behave.
E2Ws have to learn to act and remain within the silos outlined by ICE2Ws while also bringing their special flavour to the game and that’s not an easy ask.
The Core Fundamentals of E2Ws
Let’s begin with the fundamental difference between ICE and EV - an ICE engine starts with Chemical energy, changing it to Thermal, and eventually converting it to Mechanical. Even with mechanical energy, engines have to change a reciprocating motion to a rotating one that then gets transmitted to the wheels.
In ICE, it’s a lot of necessary - yet inefficient - stuff being done to start spinning the wheels.
In comparison, electric mobility is elegant - electrical energy gets converted to mechanical and the base mechanical motion is rotating. There are far fewer moving components, leading to lesser energy losses. The most important components - battery and motor - are sealed units and last a very long time, if you have made them properly.
As a result, while thermodynamic cycle-based powertrains can hardly deliver an overall efficiency in the mid-30-per cent, the efficiency of electric powertrains ranges between 80-percent to the high 90s.
That efficiency is the core foundation of E2Ws.
At this point let us define the Core Fundamentals of E2Ws:
Simplified riding experience
High efficiency
High Instant torque = High acceleration
Cost-effective
Electronics, UX/UI, Displays, Infotainment, Navigation, Integrations
Intelligence - sensors and chips
(at the performance end) Cutting edge
But then there are the constraints
The key differentiation between ICE2Ws and E2Ws is that the fossil fuel vehicle ‘generates’ its energy on the go while the electric vehicle ‘stores’ its energy.
It’s ‘almost infinite’ against ‘finite’ and the E2Ws should never win. There is a limit to how much energy one can store because storage is heavy and a large chunk of that energy is being used to carry the storage itself.
Do we still have hope?
E2Ws still make a lot of sense primarily due to two reasons:
Use case - enough data suggests that commuter mopeds and scooters are used for less than 40 km every day. That is a small hop and most E2Ws can store enough energy to do that. This defines Use Case 1 which we would explore below.
Human stamina - there is a limit to how much you can ride before you break your back. Then you need to take a break. That is the time when the E2Ws can store some energy for your next trip. This defines Use Case 2 which we would explore further.
Use Case 1: The Eco Commuter
E2Ws make very good commuter scooters/mopeds. They are simple, offer good packaging space, are very unisex, don’t vibrate, and (most importantly) are easy to operate.
The battery and motor both need their electronics - Battery Management System (BMS) and Motor Controller Unit (MCU) - to work efficiently. And that is okay, today’s China world is very adept at manufacturing electronics at scale and low costs.
What also happened somewhere in the E2W journey is that along with these almost mandatory electronics, manufacturers also started throwing in some nifty sensors, displays, and Inertial Measurement Unit (IMU) sensors in the vehicle. As a result, some very advanced features like traction control, self-cancelling indicators and proximity lock/unlock which were hitherto available only in high-end ICE2Ws, could now be offered in these rather cheap mopeds.
The displays themselves have been a giant leap forward in customer experience. From black/white/red needles moving against contrasting dials, the world was suddenly designing fonts and patterns. The customer favours the new UX/UI experience and that is one area where ICE2Ws are grudgingly following.
However, take a step back to look and this is whipped cream on a piece of packaging cardboard masquerading as a pastry. Unless the base changes, how much cream you are going to slather on has very little impact.
The Core Fundamental why people come to E2Ws is even more apparent here - they want simple, highly efficient, low-cost, hassle-free mobility. Everything else is that whipped cream and there is only momentary value in that.
UNU
This is what Berlin-based UNU Motors didn’t realise. Go to their website and we are still greeted with a bold ‘Designed in Berlin’. The global movement of talent means that adages like “Designed in XX” and Engineered in YY” have lost their impact and meaning. (We will explore this in greater detail in one of the future research pieces).
UNU was formed in 2013. Like most European startups of the period we fondly call the ‘First European E2W Renaissance’, UNU followed a three-stage template:
Import Chinese scooters: Learn and practice quality control. Realise that the oddball generic styling has few takers in fashion-conscious European markets. The company went through this experience in 2014 with the UNU Classic scooter, a ‘Classic Turtle’ styled scooter that one can buy - with tailored specs - from half a dozen Chinese factories. While UNU could work with the Chinese suppliers on the quality, the design and styling of the Classic were hard points that could not be moved.
Develop your scooter to match local tastes. This is the obvious next step when you have the predetermined notion that you are better than the other 200 white labellers that operate in Europe. So you burn millions in creating a high-cost product targeted at a low-volume market. This is what UNU did. Arguably, the UNU Move / Pro scooters are good-looking machines. But there is little beyond that.
Find a Chinese factory that can supply the scooters at the right price. You are essentially back at Stage 1, except now you are importing your own designed scooter from China.
It makes little sense because ‘your design’ here meant a lot of European styling elements encasing a rather sleek-looking battery that you designed from cells imported from a global supplier, a sealed hub motor from Bosch, and some beautiful UX/UI.
Take a few steps back (at InsightEV, we do that often) and there is nothing that puts a semblance of a barrier between you and the multi-brand dealer next door who is now importing four containers every month from China, all carrying his brand and logo, and is selling at 500 Euros lower.
Meanwhile, the Chinese - the factory to the world and for most European manufacturers - have been busy mastering their weak areas - engineering, styling & quality - and targeting the same market. Some of them (Niu, VMoto) have learnt the essence of having a brand and have come to the market with dependable, high-quality scooters at attractive prices.
It’s game over for you and that is essentially what happened to UNU. The UNU Scooter is an attractive design with high-quality components. However, unlike the Chinese or even its European competitors, the Berlin-based manufacturer could not make sales to moped-sharing operators, one of the primary buyers in the European market. The eCooltras of the world have moved their business to Niu and other Chinese brands.
Retail sales were low as Chinese brands had already started making inroads in Europe with their high-quality yet affordable scooters.
Mind you, we don’t say that manufacturing in Europe cannot work. There are some successful operations where high-quality E2Ws are being made within Europe. Typically, this manufacturing is low volume and the [products target a small geographical niche market. UNU’s acquirer Emco Electroroller Gmbh is one such case. In almost all these cases - be it the Germany-based Emco or Italy-based Tazzari/ Italian Volt, there is a big industrial group supporting from behind with scale and efficient purchasing.
We also don’t say that shipping from China is bad. It’s the nuances. If you ship from China, you might as well pull a scooter from a catalogue, suggest changes (like adding a Bosch motor, which the Chinese have no problems with), and keep control of quality, logistics, distribution and marketing.
Over its ten-year existence, the company raised USD 43.3 million in funding with the last USD 18.0 million round in 2021.
That is a lot of money in an environment where designing and industrialising a scooter for low-volume production using mostly off-the-shelf components should not cost more than USD 10 million.
UNU filed for insolvency on 23-Nov-2023. The company cited a sharp drop in demand, an increase in material and transportation costs and high operational costs as the reason for insolvency.
During the whole UNU journey, they missed the E2W Core Fundamentals of the Product focusing on being the Product. Sure, styling is important, and so maybe the brand. But they are all parts of the story where the centrepiece is the fundamental product. Once the COVID-19 downturn took away the whipped cream, all that was left was a product that could not hold its own against a Niu N-Series and could not match the prices anyway.
CAKE
If UNU came undone due to COVID-19 and some strategic mistakes, CAKE’s problems were all their own doing, including starting from the wrong foundation - form over function.
Cake is a Swedish electric motorcycle brand that has made a name for itself with its minimalistic Scandinavian design. We first met them sometime around 2020 and since then have crossed paths at various EICMAs and other shows. To us - first impressions - the products exuded the coolness often associated with Ikea furniture.
Then the cracks start showing, once you weigh the brand against the Core Fundamentals outlined above. When we took a step back (that thing again!), we realised that the design overshadowed the engineering.
This was perhaps because the founder Stefan Ytterborn had a history of creating profitable brands around design and style. His first venture - POC Sports - was a design-heavy apparel company. He sold it for USD 43.5 million in 2012.
Cake was his next venture and he used the same design template, creating products that appeared utterly desirable standing still and in pictures. The products were heavy on form over function and that looks good in investor pitch decks - Cake managed to raise more than USD 74 million, with USD 60 million of that coming in 2021 itself. Investors included the Swedish pension fund AMF.
Thanks to the funding, Cake brought products to the market faster and expanded in international markets. The high level of funding also allowed Cake to invest in the development of up to six motorcycle and pedelec platforms. However, analysts argue that the company may have stretched itself too thin and did not have the bandwidth to support marketing and sales of so many models.
We agree on that but Cake’s problems were bigger than that. In its quest for form over function, it created motorcycles that had little usage, practicality or affordability. When we first saw Cakes at an EICMA show, we were apprehensive about the CNC welds and billeted aluminium strewn across the motorcycles.
Take the Osa for example - this was a practical motorcycle for workmen and was intended for daily commuting as well as load carriage. The saddle height of 800 mm is passable for Scandinavian countries where people are tall but have little acceptance beyond the borders. The Kalk off-road motorcycle has a 915mm saddle height and an atrocious narrow seat, making it unusable and painful for most riders.
Often components like the suspension on the Kalk (Ohlins) were over-engineered, making the BoM cost high. All Cake bikes were priced way beyond what the market was willing to pay for motorcycles with similar power and use cases. In doing so, Cake went against the Core Fundamentals of E2Ws - being functional and cost-effective. It was neither.
This was not the lifestyle segment of the market so why was Cake creating lifestyle products?
Noted motorcycle designer Michael Uhlarik has written an exhaustive case study on Cake’s failure on his website MotorcycleGlobal
ARC
That was also ARC’s problem - creating ‘different’ products because you have misinterpreted the market at the start of your journey. Depending on your aesthetic sense, the ARC Vector may look dramatic, exhilarating and even polarizing. Whatever it may be to you, one cannot ignore it.
Use Case 2: Performance E2Ws
But before we examine ARC, let us explore why performance E2Ws are completely against the Core Fundamentals outlined above even though High Initial Torque and High Acceleration are E2Ws attributes.
There is a sizeable chunk of two-wheelers used for leisure. People use two-wheelers for all sorts of leisure activities - racing, highway touring, off-highway, and hardcore off-roading.
Over the last 125 years, ICE2W manufacturers have created and perfected motorcycles that do different tasks very well - there are fast-track motorcycles, comfortable cruisers, nimble motocrossers and adequate ADVs. They do their job well because we have had billions of dollars of engineering effort spent on perfecting these machines and their engines for the tasks they perform.
The problem starts when we start slotting E2Ws in the same bracket just because they are styled to look the same. It doesn’t work. We hardly have two decades of consolidated R&D efforts behind these E2Ws. Most discussions still revolve around the motor and battery sizes, and that is where E2Ws run into a brick wall.
ICE2Ws have the luxury of packing in a rather big engine if needed, and they can turn on the performance tap wherever required. The gas tank needed to support the engine does not have to grow linearly with the engine and the last time we checked, a refuelling break was still 2-min long.
In contrast, E2Ws have a tough task when it comes to any meaningful performance. Need speed? Make the motor big. Now you have to make the battery larger. That’s not easy - the ducker weighs a ton. And needs space.
Need range? Make the battery bigger. It still weighs a ton and needs space.
Essentially everything that you need to do to make a motorcycle go faster and longer ends up making it heavier and a heavy motorcycle is not fun.
Space is a luxury when you are balancing on two wheels on a wheelbase constrained by nimbleness, handling, aesthetics and material costs. Bigger also means cooling and more weight to be added so if given a choice, smaller is better.
For even the biggest electric motorcycles, 18-20 kWh of a battery pack is tops unless you wish to create an unusable monstrosity like the Evoke 6061-GT.
Track-focused sports motorcycles are at the very edge of performance motorcycles and in 20924, are edgier than they have ever been in history. They are lighter and deliver more power than ever in the past. In the litre-class category, leading motorcycles like the Ducati Panigale V4R deliver 237 PS of power with a 179 kg weight. That’s a nearly 1.0 KW/kg power to weight.
In comparison, the Lightning LS-218, the fastest under-production electric motorcycle, delivers 150kW on a 225kg weight. That’s 0.67 kW/kg. And we know that the LS 218 is special.
Across the border in Canada, Damon has been preparing the Hypersport for the past five years. It has a lot of 200s in the spec sheet - 200 PS power, 200 Nm torque, 200 mph top speed and a 200-mile range. At an expected 210 kg weight, the Damon would rock a power-to-weight ratio of 0.71 KW/kg. That is impressive and perhaps the best achieved till now for an electric motorcycle.
Both Lightning and Damon are exceptional. They use high-end technology to keep weight low - Damon has created an HPDC monocoque battery case to reduce weight.
More mainstream electric motorcycles are not even that impressive. The Zero SR/S or the Energica Ego top out at much lower speeds. Verge created a new 150 kW motor but has capped the top speed at 200 kph. Everyone weighs much higher - the Ego weighs 270kg, and the Verge TS tops out at 245kg.
Even though Damon (not yet in production) and Lightning (sells a handful every year) came very close to ICE benchmarks when they conceptualised their respective products, the gap has since then widened again.
To make matters worse, ICE2Ws still have a lot of buffers - more weight can be shaved and tweaking for power is achievable. The gap with E2Ws would only increase unless someone tries something very different.
That brings us to ARC Vehicles.
ARC Motorcycles
UK-based ARC and their Vector motorcycle first caught our attention in 2019. The motorcycle had been revealed in 2018 and by 2019, ARC had already completed the first round of the proud British motorcycling tradition - gone into administration.
Mark Truman, the owner and founder, would buy the company back from the administration and work would resume on the Vector motorcycle.
The Vector is a high-powered electric motorcycle in carbon fibre, carrying the battery as a structural monocoque, and using some format of a wishbone/hub-centre steering. Along with the motorcycle were promises of a smart helmet with a visor display and a motorcycle jacket with haptic feedback.
We never believed in the helmet or jacket, recognising them as part of a comprehensive ‘story’ any high-tech vehicle startup would need to add to their pitch deck.
However, the Vector was interesting.
The business model was always questionable. It was a product for a market that didn’t exist. At GBP 100k, you don’t buy a motorcycle, you buy a living room decoration and a conversation piece.
We looked at the price tag as seed funding for the real business - an engineering consulting. That always was the main business and the ARC guys did a few electrification projects, including electrifying the Moke.
The Vector was unimpressive
Hear us out.
Selling a nearly GBP 100k motorcycle requires obscene levels of chutzpah and incredible amounts of hopium. We saw ample of both in Mark Truman, Arc’s founder & CEO.
Mark comes from a hallowed background - he had been the bossman at Head of White Space at Jaguar Land Rover, running the firm’s ‘Skunk Works’. We consider him as someone with the genetic disposition of seeing Optimus Prime in every 16-wheeler.
Yet the Vector, the motorcycle that Arc Vehicles created, was underwhelming and pointless. Sure it had carbon fibre, it had some variation of a hub-centre steering and it had a monocoque construction. Yet, everything it did, had been done before. It didn’t push the envelope enough.
Bimota, and many others, have done hub-centre steering for years and they still sell a handful of Theses H2 and Tera motorcycles at obnoxious prices. Most of the time, a customer is buying a Bimota because he wants to collect one while they are still there and not because he is annoyed with his Panigale’s USD front diving under hard cornering.
Ditto monocoques - from old Kawasakis to new-gen Ducatis, we have seen multiple variations. There is Damon with a very plausible monocoque that also appears more intelligent and functional.
Even the carbon-fibre was not a novelty - there have been many carbon-fibre-constructed exotic motorcycles in the past and many modern motorcycles use elements of carbon-fibre in their construction.
So nothing that Arc did had not been done before. For a motorcycle rocking a GBP 100k price, customers want something jaw-dropping, something so fast that would scare them on the road, and something that edges out everyone on the spec sheet.
The motive side of things is where the Vector disappointed the most - the motor produced all of 87kW, about 60% of what an electric superbike produces nowadays. That number wasn’t over the top in 2018, it is even less impressive today.
It was strange - ARC did everything that portrayed a picture of it being a technology tour de force but held back on the powertrain. The Vector did not impress even on the weight. At 240kg, it was not even the lightest. Far from it, it was 10-15% heavier than top-spec rivals like Lightning and Damon even though it had the smallest battery.
It was as if they intended the motorcycle to be a living room ornament and nothing more. The problem is that exotic hyperbikes stop being that if they are not the cutting edge.
The Arc just wasn’t and that was a violation of the Core Fundamentals.
InsightEV is releasing the Global Landscape and Future Prospects Report on July 1st. Watch this space for more details in the coming weeks.