Plugged In

E-Bikes and Segways are Slow to Catch on—But Rebates Help

Remember the hype? The gyroscopic Segway would revolutionize personal travel, its backers claimed. And aging baby boomers would all ride electric bicycles—at least according to Lee Iacocca, who started selling the battery-powered E-Bike in the 1990s. "I"m bringing you the future of transportation," Iacocca enthused, "and it’s electric!"

Light electric vehicles can save energy, cut congestion and spare the air, and have gained attention in the last decade for their positive environmental potential. But in practice, they haven’t quite caught on. Though more electric scooters now navigate city streets—there are more than a million of them in the U.S.—electric bicycle numbers are still low, and the Segway remains a novelty. Why? The Segway’s $4,495 price tag is one barrier. Scarcity of distribution outlets has also squelched sales—early Segways were only available through Amazon.com. Though sales of 50,000 were predicted in the first year after its 2002 debut, total sales have still not reached that level, admits Segway Communications Manager Carla Vallone. "We are very pleased with where we are with sales," she adds, despite a recall of all 6,000 Segways sold through September 2003.

Segway tries to cultivate an environmental image and plans to market to green consumers, but charismatic company founder Dean Kamen often drives a Hummer to work. In defending that choice, Segway issued a statement that said in part, "If our society only scrutinizes "the brand" of vehicle one drives and not what vehicle is the most effective for the function you have to perform, we are doomed to focus on the tree instead of the forest."

Some believe that Segways are dangerous. Advocates for the blind argue that, zipping along sidewalks at six to 12.5 miles per hour, three-speed Segways pose a hazard to blind pedestrians. Certain theme parks have banned them, and a few cities have restricted their use, including San Francisco, which does not allow Segways on sidewalks.

Despite these early disappointments, Segway has expanded retail outlets and still hopes its product will catch on. Segway use is legal in 44 states, the company points out, with laws treating Segway users as pedestrians. And a Segway rider does look like a pedestrian on wheels. Battery-powered and balance-driven, a Segway will travel eight to 15 miles on a charge. Riders move and steer by leaning in the direction they want to go—forward, left, right—or by standing straight to stop.

Law enforcement agencies and postal services have shown some interest in the Segway. Police in Baltimore, Chicago, Orlando and St. Paul have either tried or bought them. Company literature points out the Segway can replace short car trips with an emissions-free alternative. And as oil and gas prices rise, the Segway’s energy efficiency—equivalent to 450 miles per gallon—could make the vehicle more attractive.The same factors might boost popularity of electric bicycles, whose U.S. sales have climbed from about 35,000 in 2002 to 45,000 in 2003. And 2004 sales are expected to reach 65,000, says electric bicycle expert Ed Benjamin, whose website tracks world sales.

Still, the U.S. market lags far behind that in China, for instance. The Chinese, Benjamin notes, will buy seven million electric bikes in 2004, up from four million in 2003. What accounts for the slower U.S. start? "Most major bicycle companies experimented with low-power electric bikes in the late 1990s," says Benjamin. But, he says, most of the bikes were too expensive, not powerful enough and sometimes not reliable. Service on electric bikes has been hard to obtain. Consumers ended up disappointed with the product, and companies were disappointed with sales.

Americans, says Benjamin, want simple, low-cost (less than $600), reliable and easy-to-service electric bikes that can carry them short distances and up small hills. Advertising would help such vehicles to sell, he believes, and he predicts that "the first company to use real advertising will enjoy much better sales of electric bikes." With those changes, the U.S. electric bicycle market could grow to 1.5 million per year, with sales to retired people for recreation, to commuters in urban areas, and for use as toys.

In a few places, though, the market for electric bikes is already hot (literally, since sales tend to be higher in warmer climates). Probably the hottest market is in Santa Cruz, California, where about a thousand new electric bikes now hum down city streets thanks to publicly funded rebates.The Santa Cruz electric bike mini-boom began in March 2000, when a collection of area agencies and nonprofits initiated the rebate program for local residents. Buy an electric bike, and the program dishes back a big chunk of the cost—up to $500 initially, now a maximum of $375, which is still substantial enough to attract a steady stream of participants.

To make sure the bikes will actually be used, the program requires buyers to take a safety and electric bike training course before getting their rebate. By last March, 1,307 people had taken the training course, and of those, 958 had bought bikes. The program expects about 24 new sign-ups per month for the rest of the year.

The Santa Cruz program aims to reduce single-occupancy car trips and the congestion, fuel consumption, parking demand and air pollution they generate. And evaluations have found that 62 percent of participants do in fact use their electric bikes to replace solo driving. On average, they take their bikes out three to four days each week and ride them 24 to 28 miles. One study estimates the Santa Cruz program may thus be saving up to 44,000 gallons of gasoline per rider per year, and cutting pollution proportionately.

Word-of-mouth kudos for the program have been very positive. About 84 percent of participants are "delighted" or "satisfied" with their bikes, and 97 percent would recommend riding an electric bike to others. Some electric bike users—especially those who couldn’t drive previously for medical or other reasons—are thrilled to have increased mobility. Others are pleased with the ease of electric biking.

The Santa Cruz program even got an early boost from Lee Iacocca. With the help of a local Isuzu dealer who counts Iacocca as a friend, organizers enticed the former auto exec to headline a kickoff event. Iacocca’s E-Bikes now account for a significant percentage of electric bicycles sold in Santa Cruz. And it turns out Iacocca’s instincts were right, at least in part: the bulk of program users fall between 40 and 60 years old, aging boomers looking to benefit from power-assisted pedals.