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A popular rental item with tourists and urban commuters before the pandemic, electric scooters are making a resurgence – this time among those looking to buy the two-wheeled mobile micro-devices.
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Manufacturers are seeing sustained sales as electric scooters have become staple items for a number of young people. Scooter makers saw sales surge during the Covid-19 pandemic last year as people trapped at home searched for fun entertainment, and the trend continued this year, the NPD analyst said. Juli Lenett at Investor’s Business Daily.
As offices begin to reopen, the electric scooters that started popping up a few years ago could further boost sales for urban commuters in 2021. And some scooter makers say rentals are starting to come back as well.
“They’re definitely gaining popularity,” Lenett said. “What’s behind it is Covid. It’s something that kids can play together outside while staying six feet apart.”
Market primed rental scooters
Scooter rental services such as Bird and Lime have started the market by getting people used to a new mode of transportation from 2017-2018. These app-based services have become a try-before-buy marketing opportunity for scooter equipment vendors.
As early adopters began to buy electric scooters, others wanted them.
“It had a snowball effect,” Lenett said.
Seeing the emerging trend, Bird began selling scooters to consumers in 2019. The Los Angeles-based company plans to go public as part of a merger with Backspace II (SWBK), a special purpose acquisition company, this quarter.
And based in China Niu Technologies (NIU), an electric moped maker, hit the market with its first electric scooter in the United States on July 13. Its Niu KQi3 scooters start at $ 529.
“Huge spike” in sales last year
Global sales of electric scooters reached $ 2.54 billion in 2020, with China being the largest market, according to Grand View Research. Sales are expected to reach $ 5.19 billion by 2028, with compound annual growth of 10.3% from 2021 to 2028.
Sales of e-scooters in North America totaled $ 185.1 million in 2020, according to Grand View Research. It sees the market growing at a compound annual rate of 19.6% from 2021 to 2028.
Jeff Lawrence, marketing director for Dallas-based GoTrax, said sales of electric scooters in the United States had a “huge spike” last year.
“We are seeing continued growth year over year,” Lawrence told IBD. “We will be selling more electric scooters this year than last year, even with the extreme growth from last year.”
Lawrence predicts that there will be an upheaval in the market, with only companies providing good aftermarket support booming.
Private companies dominate electric scooters
The electric scooter market is highly fragmented and dominated by private companies such as Razor USA, GoTrax, Segway, Swagtron and more.
Electric scooters come in a wide range of prices depending on their capabilities. The cheapest scooters are in the toy category, starting at around $ 130. The more expensive electric scooters have smart safety features like locking and tracking. They can also exceed 15 miles per hour and travel farther between charges. These products range from around $ 300 to over $ 1,000.
It’s just the scooter. Cyclists should also buy helmets for safety reasons.
Retailers selling electric scooters include Amazon.com (AMZN), Best buy (BBY), Walmart (WMT), Target (TGT) and more.
“We’ve seen significant growth (in electric scooters) over the past year,” a Walmart spokesperson said in an email. “Walmart sells these items both in-store and online, with an expanded assortment available online.”
Large suburban market for electric scooters
GoTrax believes the urban commuter market is a bigger opportunity than the leisure market, Lawrence says.
“For us, the commuter market is on fire,” Lawrence said. “This is the most common reason for using an electric scooter.”
The company’s most popular scooter is the GoTrax G4 electric scooter, which costs $ 599.99. It has a range of 25 miles between charges and can travel up to 20 miles per hour.
GoTrax sells primarily online, but has some in-store availability at Walmart, Target, and other stores, Lawrence says.
The NPD retail tracker recorded 3.3 million toy-grade electric scooter buyers in the United States in 2019. These scooters have a speed limit of 15 mph. The number of buyers rose to 6.2 million in 2020 and is on track to equal that of this year.
Dollar sales of these scooters have more than doubled in the past two years, NPD’s Lenett said. Sales totaled $ 96 million for the 12-month period ended May 2019. Sales reached $ 225 million for the 12-month period ended May 2021.
Follow Patrick Seitz on Twitter on @IBD_PSeitz for more articles on consumer technology, software, and semiconductor stocks.
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