What to Expect when Sourcing E-bikes from Taiwan
One of the most common requests we receive since the institution of anti-dumping duties on China produced e-bikes is sourcing from Taiwan based manufacturers for similar e-bikes.
Not only are European brands in a hurry to move their production, American brands are also keen to find more suitable production elsewhere. Currently, the United States have officially granted various Made in China bicycles and electric bicycles tariff exclusions. However, spurred by the inconveniences caused by the Coronavirus, we are now seeing some brands choose to explore options in Taiwan and Southeast Asia.
One important fact that must be realized when moving production is cost. Many clients are bewildered when presented with the costs of producing in Taiwan compared with from China. Bikes produced by Taiwanese manufacturers are generally 30-50 percent higher than average China manufacturers. With years of experience ahead of China, manufacturers in Taiwan are able to offer better quality and more inclined to produce high-end models. Manufacturers in Southeast Asia are also increasingly producing bikes previously sourced from Taiwan, as the global supply chain is shifting. Traditional bikes are now mostly produced in Southeast Asia for favorable trade agreements and import tax benefits. Meanwhile mid to high end e-bikes bound for Europe are produced primarily in Taiwan.
Another factor which must be considered is the percentage of components on any bicycle that have China origins. This means the component was produced in China and then shipped to another country for assembly. This rule is in relation with European anti-dumping regulations. Currently, China is still producing a great bulk of all bicycle frames, drivetrains, batteries, and various components used on bikes around the world. Brands building bikes in Taiwan and Southeast Asia need to be careful when structuring their Bill of Materials so that only a small percentage of parts are of China origin. National customs agencies in Taiwan and Vietnam are proactively enforcing this policy and fining companies heavily for circumventing rules.
Lastly, one factor we noticed is that brands that have operated in China have a strong reliance on Chinese logistics for shipping. After moving production to Taiwan, Vietnam, Indonesia, Thailand, and Cambodia, many brands find that they are simply unable to ship complete bikes and batteries with the same ease as when they were in China. This reason alone shows how far China has come in developing their infrastructure and supply chain logistics. China spent the last few decades building almost all consumer products for the world. The logistics apparatus available in China is simply unparalleled compared with Taiwan and Southeast Asia, where shipping is generally still very expensive and limited.
When seeking production for your bikes and e-bikes in Asia, be sure to contact Oerus to learn more about our supply chain management services.
