Header image source: Tezeus.
The latest tariff changes are nothing short of a major win for the outbound trade industry.
The US and China have reached an agreement to temporarily suspend most of the additional tariffs imposed on each other since April. The US has agreed to lower the base tariff on most Chinese goods from 145% to 30%.
No one can predict what Donald Trump will do next, but for now, there’s a collective sigh of relief.
Many founders in the industry have just experienced an emotional rollercoaster.
When the 145% tariff was announced, Zhang Xi, founder of e-bike company Velotric, was in the US. The company had been focused on the US market since its inception. That day, Zhang Xi’s wife was visibly anxious. She urged him to return to Shenzhen immediately after receiving over 20 messages asking if Velotric was going bankrupt.
“For the past two years, the saying goes that if you’re not going global, you’re out. Now, even going global might not save you,” Zhang Xi later lamented at a Guangdian Capital event.
From the moment Chinese hardware companies began expanding overseas, Europe and the US have always been their preferred markets. Many high-end, novel product categories, like e-bikes, can only find fertile ground in mature Western markets. While Europe and the US are not identical, they share enough similarities for Chinese hardware companies to navigate comfortably across the Atlantic.
In the case of e-bikes, growth in Europe has already plateaued or even declined over the past two years. That made the US, with its lower penetration rate, the obvious next frontier.
Then came the tariff hike, which threw the entire e-bike industry off course.
Earlier this year, Tezeus shipped two containers of e-bikes to the US in preparation for market entry. Just as they were finalizing pricing and preorders, Trump announced the tariff hike. The company froze its launch plans, opting to wait and monitor the evolving policy and industry trends before making a move.
Still, Chinese e-bike companies have no choice but to keep moving forward.
E-bikes are clearly positioned for overseas markets, specifically in developed countries. With prices ranging from USD 200–5,000, they are far from cheap compared to traditional bicycles. Only regions with strong cycling cultures can sustain demand for such products. Beyond Europe, that leaves just the US.
Inside the office of e-bike startup Urtopia, dozens of models are lined up for display. Founder Zhang Bo enthusiastically introduced the latest designs, all of which are slated for continued shipment to the US this year.
Previously focused solely on Europe, Urtopia now plans to aggressively expand in the US and crack the top three in market share. Regardless of how high tariffs go, the company has no plans to pull back, even if that means enduring steep losses in the short term.
As Europe shows signs of fatigue, the US has become a fallback for Chinese e-bike makers. It boasts strong consumer demand, a stable business environment, and unlike the fragmented European landscape, constitutes a unified market. Crucially, it hasn’t yet become overwhelmed by market competition.
But now, these companies are walking a tightrope. Stay in Europe and fight over a saturated market, or brave the volatility of the US where wild swings in policy could collapse a startup overnight. Chinese e-bike firms are still yet to mature, but they have already been forced into a shakeout.
The day Trump’s tariff announcement hit, Zhang Bo sent a note to his team. Essentially, he sought to reassure that for truly global companies, the tariffs may not be a bad thing. The opportunistic sellers will get weeded out. Only brands with real strength will remain.
Even with a little breathing room now, no one’s letting their guard down.
Abandon the US market, or not?
In April, Tezeus founder Guo Dongsheng had just returned from a clean energy event in Hungary. Tariffs dominated the conversation. The mood at the venue was a mix of optimism and pessimism, highlighting the contrast between Europe’s stability and the unpredictability in the US.
“We used to think the US market wasn’t worth our time. Its size is only around USD 1.5 billion. By contrast, Europe’s e-bike market had already reached nearly USD 20 billion in 2022,” Zhang Bo told Hard Ke. “The US felt small and underdeveloped.”
Europe was once the unanimous choice for Chinese e-bike companies.
Cycling has long been a way of life in many Western European cities, where roads were designed with cyclists in mind. Riding is both a lifestyle and a daily habit.
From 2016–2021, Europe was among the fastest-growing e-bike markets globally, with shipments rising from 1.67 million to 5 million units. In 2022, that number hit 7 million.
According to research firm Data Bridge, Europe’s e-bike market reached USD 4.6 billion in 2023. In comparison, the North American market (including the US, Mexico, and Canada) stood at just USD 3.24 billion.
“Germany’s e-bike market alone is three times the size of the US. Everyone owns a bike there. The penetration rate is 100%. When we launched Urtopia in 2021, our goal was to build a premium brand for the world’s best market,” Zhang Bo said.
Tezeus also chose Europe over the US. “Europe’s market is more demanding and has a deeper cycling culture,” Guo said. “If we can master supply chain and brand operations in Europe, we’ll have an edge when expanding to the US later.”
But by 2024, both firms had changed course. The reason was simple: Europe’s economy is in decline.
Zhang Bo saw it firsthand during a client visit in Munich last year. “The guy had a pile of firewood outside his door. I thought it was some aesthetic choice, but it turned out that he chopped it himself to save on heating costs.”
E-bikes, being non-essential goods, are closely tied to economic health. Starting in March 2024, Zhang observed a wave of bankruptcies among longstanding European brands. The market began to unravel.
One clear signal: premium middrive motors from Bosch, typically priced above EUR 3,000 (USD 3,360), were suddenly showing up in low-cost listings. “Bosch isn’t cutting prices. Those are fire sales by companies trying to survive.”
The data backs it up. According to Eurostat, EU e-bike imports dropped to 642,000 units, down 27% year-on-year and even below pre-pandemic levels. The total import value fell 33%.
Meanwhile, in the US, e-bikes drove 63% of the entire bicycle industry’s revenue growth between 2019 and 2023, according to Circana. By 2023, e-bikes made up 20% of the total market.
The trajectory looks promising. Statista forecasts US e-bike revenue to reach USD 2.17 billion in 2025, with a 13.06% CAGR (compound annual growth rate) between 2025–2029.
Guo said US consumers have become more discerning. “Many tried cheap models and realized the experience wasn’t great. Now, they are willing to pay for quality.”
Urtopia felt it immediately. After shifting its focus to the US, revenue in Q1 this year, which is traditionally a slow season, was already three times higher than the same period in prior years.
With little excitement left in Europe, no e-bike brand wants to walk away from the US.
Uncertainty around US cost advantages
Beyond growth potential, Chinese companies have shifted to the US because, historically, it’s been cheaper.
For e-bike makers used to Europe’s environment, even Trump’s dramatic tariff hikes don’t seem shocking. They have been dealing with high costs for years after all.
The EU has long imposed anti-dumping and anti-subsidy duties on Chinese e-bikes, with rates ranging from 9.9% to 70.1%. These policies were recently extended through 2030.
An industry insider told 36Kr that companies have developed three workarounds. One is to engage logistics agents to declare a lower invoice value. Another is joining Europe’s whitelist program, which caps tariffs at around 30%. The third is relocating production: either assembling imported Chinese components in Europe, or sourcing from both China and Vietnam, with final assembly in Vietnam to qualify for origin-based tariff reductions.
But none of these options are sustainable. “Europe’s goal isn’t just to tax us. It’s to force the upstream supply chain to relocate,” the insider said. “For now, assembling in Europe is fine, but in the long-term, components may also need to be produced locally.”
Earlier this year, Okawa, a Chinese motor manufacturer, announced it would set up a production base in Portugal.
“The goal is for downstream brands to eventually source motors locally,” another executive said.
The EU’s motives are similar to the recent “reshoring” push by the US.
Before Trump, the US applied standard import tariffs to Chinese e-bikes, which was one of the main reasons Chinese companies found the market attractive.
When Tezeus planned its US pricing, it considered matching its European price and offering steep discounts.
The US had two key advantages: no anti-dumping duties, and no VAT. Combined, these add up to 50% of the delivered price in Europe. With lower shipping costs as well, selling in the US looked highly profitable. But after the tariff spike, US costs nearly matched Europe’s. Discounts were no longer viable.
Still, Guo noted that because US tariffs are applied on cost, the final delivered price is still slightly lower than in Europe.
For now, Tezeus will watch how leading exporters and rival brands adjust their pricing before finalizing its US strategy.
The coming shakeout
Industry insiders agree that the US e-bike market is rather chaotic. It’s riddled with cutthroat pricing and questionable players.
If tariffs continue to rise, the hardest hit will likely be sellers of low- to mid-end bikes on Amazon.
One seller offering bikes priced between USD 499–1,500 broke down the math: base procurement costs range RMB 1,500–1,800 (USD 210–250), Amazon takes a 15% commission, logistics cost USD 30–40 per unit, promotions take 10–20%, and returns add more strain. On top of that, UL certification costs start at RMB 300,000 (USD 42,000) per SKU.
“I’m barely breaking even on my USD 499 model,” the seller said. “Some are selling for even less. I don’t know how they survive.” With tariffs up, he plans to kill unprofitable SKUs and raise prices.
Certification is tightening too. Amazon has started strictly enforcing UL standards.
One executive noted that in the past, some sellers paid domestic agencies to forge UL reports.
In truth, the crackdown had already begun before tariffs. Many Amazon sellers ran steep clearance sales earlier this year. Once they are wiped out, the US market could become more regulated.
Zhang Bo sees this as a positive. As weaker players exit, strong brands will gain more ground. “Those selling USD 100 bikes on Amazon? They are going to get flushed out.”
RELATED ARTICLE
Chinese firms only entered the e-bike market in force during the pandemic. Their quick rise was powered by a robust electric vehicle sector and the country’s dominance in bicycle manufacturing.
Over the past two to three years, Chinese companies both big and small have flooded into the space. Thanks to low-cost labor and a complete supply chain, they took over the global e-bike market quickly. But now, amid growing geopolitical friction, the margin for error is shrinking. The survivors will be those with supply chain control, strong branding, and R&D. Only they will endure the volatility ahead.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Leslie Zhang for 36Kr.