This Detroit startup is bringing e-bike manufacturing to the U.S.
This Detroit startup is bringing e-bike manufacturing to the U.S.
Bloom is working with American factories to create a new domestic supply chain for light electric vehicles like e-bikes.
BY Adele Peters
In the PJWS factory, an hour’s drive from Detroit, workers have been making auto parts for four decades. But across the street, a new spinoff company called Edison will soon begin making parts for electric bikes instead.
The company is one of the latest to partner with Bloom, a startup that’s helping build an American supply chain for micromobility brands. Right now, the majority of electric bikes and scooters are made in China or Taiwan. A smaller number come from Europe. Only around 3% are made in the U.S. Bloom is trying to change that—and help the overall industry grow more quickly.
Micromobility companies have struggled to manage supply chains
Early in the pandemic, e-bike and e-scooter sales surged. But then many companies started to falter. Last summer, VanMoof, once known as the Tesla of e-bikes, filed for bankruptcy. Then Superpedestrian, an e-scooter company, shut down its U.S. operations. Tier, a European micromobility company, laid off nearly a quarter of its employees. It sold Spin, its e-scooter brand, to another company called Bird. Then Bird, once valued at $2.5 billion, filed for bankruptcy. Early this year, the electric motorcycle company Cake followed. (VanMoof, Superpedestrian, Bird, and Cake were later acquired; Tier merged with a competitor.)
The companies faced common challenges in managing complex supply chains. Bloom is taking on that back-end work. “We pull contract manufacturing, logistics, warehousing, and after-sales support onto a nationwide platform,” says Bloom cofounder Justin Kosmides. “It’s meant so these companies can offload their operations or parts of their supply chain onto a shared network. It gives us the benefits of vertical integration without the heavy capital expenditure necessary to truly spin up your own factory or production lines.”
The advantage of local manufacturing
Kosmides, who previously started an e-bike brand called Vela that’s now made in Detroit, understood the practical advantages of working in the U.S. (Cofounder Chris Nolte previously founded the e-bike retailer Propel Bikes.) “You’ve got your replacement parts in the same warehouse,” he says. “You have the ability to have shorter production windows. You can run a much leaner supply chain.” It’s possible to respond more quickly to shifts in demand, and wait longer to order supplies like batteries, freeing up capital.
American bike brands moved most manufacturing to Asia decades ago. But e-bikes and other light electric vehicles (including tiny golf-cart-like electric cars), which are more complicated to produce, are a fit for American factories that have been doing other work, Kosmides says.
“We could go to a contract manufacturer here in the United States and say, ‘You historically have been assembling the Ford F-150 dashboard—what if we brought you five cargo bike companies or three electric motorcycle companies, and make that small investment to restructure your supply chain?’” he says.
The approach can particularly help startups that don’t have enough volume or proven sales to easily work with a contract manufacturer. Though there are differences between brands (and IP is protected), the basic work is similar enough that it can be aggregated. “There’s only so many ways you can put a handlebar on and assemble a e-bike,” Kosmides says.
Edison, the factory that spun off from an auto parts manufacturer, was already focusing on new forms of transportation, from autonomous shuttles to electric boats, and wanted to work with Bloom to help electric bikes and scooters grow. “We don’t have the domestic supply chain [for those vehicles],” says Edison vice president Brandon Bartneck. “From a cost perspective and also a risk perspective, I see a need for having the ability to service these companies with a domestic, or at least North American, supply chain.”
How American-made e-bikes and scooters could grow
Bloom is now working with eight different American manufacturers, from Michigan to South Carolina. (For now, the work is all assembly, but American-made parts like batteries could follow.) There’s potential for this type of work to grow significantly in the U.S., says Kosmides. It helps that the Inflation Reduction Act has boosted domestic manufacturing in general, he says, even though the IRA didn’t include the same incentives for electric bikes as it did for electric cars. New tariffs on Chinese goods could also push more micromobility brands to produce in the U.S.
More policy support for micromobility makes sense, says Kosmides. It’s a way to “reposition similarly qualified jobs that have been displaced in the automotive industry,” he says. And micromobility—particularly e-bikes—is helping displace fossil fuels faster than electric cars. The industry should grow here. “We need to ask ourselves, if we want to go green, do we want to be importing cheap and dirty from abroad?” he says. “It’s much easier to justify federal tax credits for smaller EVs when you can point to jobs in South Carolina, California and Detroit. Why can’t the EV tax credit be extended to smaller form factors?”
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