Electric scooters have seen explosive growth in recent years as a convenient, eco-friendly transportation option in urban areas. With major companies like Bird and Lime rolling out scooter sharing services, and sales of personal scooters also rising, there is increasing interest in how to invest in scooters as a promising market. However, the scooter industry also faces challenges around regulation, safety and sustainability. In this article, we dive into the opportunities and risks in investing in scooters, market trends, major players, and things to consider before putting your money into this rapidly evolving space.
Massive growth creates opportunities but regulations remain a hurdle
The global electric scooter market size was valued at USD 18.6 billion in 2020 and is projected to expand at a compound annual growth rate (CAGR) of 8.5% from 2021 to 2028 according to Grand View Research. The market has exploded in recent years, especially for shared scooter services. However, many cities have scrambled to adjust regulations around scooter parking, riding and safety. Investing in scooter manufacturing or services requires keeping a close eye on local regulations which can make or break profitability. Companies need ingenuity to expand services responsibly while working closely with city governments.
Dominated by large players but new entrants can find niches
The scooter sharing market is dominated by heavyweight players like Bird and Lime who have raised billions in funding. The manufacturing side includes major names like Xiaomi and Segway-Ninebot. While the large players control much of the market, there are still opportunities for new entrants, especially those with innovative offerings that fill a niche. Specialized scooters for particular uses like off-roading or with custom features can differentiate from the mass market. Regional opportunities also exist, as regulations and preferred scooter types vary across different countries and cities.
Scooter tech continues to evolve with AI, IoT integration
Scooter technology is rapidly evolving, with integrations like built-in GPS, artificial intelligence, and internet-of-things (IoT) capabilities. GPS allows geo-fencing for designated parking areas, while IoT means scooters can transmit real time diagnostics for proactive maintenance. Machine learning algorithms are being implemented for predictive analytics to improve fleet optimization. Investing in scooter tech providers or manufacturers who are on the cutting edge of these innovations can pay off handsomely. At the same time, it remains challenging to integrate new technologies smoothly into robust business models.
Sustainability concerns prompt recycling, swappable battery efforts
With massive scooter fleets taking over sidewalks globally, there are growing concerns around environmental sustainability. Scooter lifespans are relatively short, leading to immense e-waste. Some companies are responding by developing programs to recycle old parts. Others are creating scooters with swappable batteries to extend lifespan. Companies taking active measures to improve sustainability can gain favor with regulators and consumers alike. Investing in scooter companies with substantive sustainability programs can be a differentiator.
The scooter industry holds exciting potential for investors but still carries risks around evolving regulations, dominant players, safety issues and environmental impact. Companies rolling out unique offerings, strong partnerships with cities, cutting-edge technology integrations and sustainability measures can be smart bets. However, thorough due diligence is required given the rapid pace of change in this emerging market.