E-scooters get ready for takeoff in Taiwan
2018/02/05
In the early morning of Aug. 6, 2017, more than 500 Gogoro riders from Hsinchu, Kaohsiung, Taichung and Taoyuan cities gathered in Sanchong District of New Taipei City in northern Taiwan to stage a “quiet” revolution. Together, they traveled in style across Taipei Bridge, a major access point to Taipei City that is often crowded with legions of boisterous motorcycles spewing clouds of exhaust.
Further south in Dongpu Village of Taoyuan City, Chiang Ching-shang began the day by riding his E-moving scooter to meetings, carrying out his duties as the village head.
More than ever before, an increasing number of people are choosing e-scooters over traditional motorcycles.
About one quarter of global carbon emissions come from vehicles, with privately owned conveyances accounting for half of the total. In light of this challenge, the development of green transportation has become a top priority.
Taiwan boasts the world’s highest motorcycle density rate. However, e-scooters did not become popular until around two years ago. While only 5,660 e-scooters were produced in 2015, the number surged 296 percent to more than 22,000 during the first nine months of 2017.
According to Huang Yi-yuan, an e-scooter sales manager at Taipei-based China Motor Corp., an increasing number of people are inquiring about e-scooters because they are quiet and environmentally friendly. “People who have tried e-scooters say they won’t go back to the old way,” he said.
When it comes to developing this trend, Taipei-headquartered Gogoro Inc. is certainly one of the key players.
When China Motor launched the country’s first e-scooter E-moving in 2010, the product was given a lukewarm reception. The situation did not change until 2015 when Gogoro 1 hit the market with its trendy design and price tag of NT$128,000 (US$4,403).
“Gogoro 1 was a real eye-catcher that helped drive market development,” said Tseng Yu-chien, an analyst at Hsinchu County-based Industrial Economics and Knowledge Center. According to Tseng, Gogoro is good at using social media to grow its business. By responding to consumer needs and introducing a smart user interface, the company successfully changed public perception about e-scooters.
Gogoro Marketing Director Chen Yen-yang said there are many social media groups of varying sizes centering on Gogoro. These people will meet at regular intervals to share their views, cementing relationships along the way.
The rise of Gogoro also served as a stimulus for China Motor, which gradually developed a knack for the industry and decided to shift its focus to the commercial market. As a result, E-moving is now the most common e-scooter in operation at Taiwan’s major tourist sites and outlying islands. A primary marketing strategy of China Motor is to invite village heads like Chiang to ride E-moving scooters in their neighborhoods.
Among the one dozen or so e-scooter producers in Taiwan, Gogoro commands an 82.2 percent market share as of last September, followed by China Motor at 11.2 percent.
In an effort to reduce carbon emissions, the government has implemented a raft of measures and incentives in recent years. Among these is a NT$7 billion investment by the Ministry of Economic Affairs. As per the government’s plan, NT$4 billion will be spent on establishing battery replacement and charging stations, NT$2 billion on subsidizing e-scooter purchases as replacements for two-stroke motorcycles, and NT$1 billion on battery and motor R&D. The MOEA expects annual sales of e-scooters to rise to 40,000 units in 2018 and top 200,000 by 2022.
This project is already paying dividends, as reflected in the fact that 60 percent of Gogoro riders in the southern city of Kaohsiung made their purchases to replace two-stoke motorcycles. According to Gogoro co-founder and CEO Horace Luke, “this is killing two birds with one stone.”
Currently, there is a recharging format war taking place in Taiwan between major e-scooter manufacturers. Some, like China Motor, advocate battery charging, while firms such as Gogoro prefer battery swapping.
In May 2017, the Executive Yuan voiced its support for the battery exchange approach and proposed standardized e-scooter battery specifications, but the decision was criticized by some as favoritism. Later, the Industrial Development Bureau under MOEA said both approaches would be adopted, and that it would announce standards for the systems in early 2018.
Globally speaking, while charging is preferred to battery swapping, the former approach commands higher investment costs. “As both methods have their drawbacks, the IDB’s decision may well be seen as a compromise that protects both the consumers and producers.”
The thriving development of e-scooters is also boosting the enhancement of traditional industries in Taiwan. Luke once proudly said, “all components of Gogoro e-scooters are made in Taiwan, including both software and hardware.”
According to Tseng from IEK, over 90 percent of traditional motorcycles in Taiwan are produced locally. As nearly 80 percent of the components and parts of traditional motorcycles are also used in e-scooters, the local content rate of Taiwan’s e-scooters can also top 80 percent. “This one-stop ecosystem provides a strong competitive edge for Taiwan’s e-scooter producers and frees them from being under the yoke of foreign suppliers,” she added.
One of the beneficiaries of this trend is Cheng Shin Rubber Industry Co. Ltd., which produces and markets car tires under the brand Maxxis. The company supplies customized tires for Gogoro, and as demand for the Gogoro 2 continues to soar, orders are continuing to stack up.
During an investor conference held in August 2017, Cheng Shin Vice President Liao Cheng-yao said Gogoro ordered 12,000 tires a month, an increase of 500 percent over the same time the year before.
CPC Corp. Taiwan, the state-owned petroleum, natural gas and gasoline company, also announced that as soon as the MOEA decides on the technical specifications for battery replacement and charging stations, it will spend NT$2 billion setting up 1,000 such facilities in three years to support the initiative.
E-scooters are definitely an emerging global industry, and many countries have already proposed their schedules to phase out gas motorcycles. For example, both the Netherlands and Norway will ban sales of gasoline and diesel cars starting in 2025, while France, Germany and the U.K. will follow suit in 2030.
The future of e-scooters is full of promise.
Source: Taiwan Today (https://taiwantoday.tw/news.php?unit=7&post=128781)
