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Electric Bike Company Picks Up the Cost of Tariffs

A Seattle electric bike company is offering an insight into how tariffs are impacting certain…

  • February 21, 2019

A Seattle electric bike company is offering an insight into how tariffs are impacting certain “big ticket” consumer products.

The consumer-direct ebike company, Rad Power Bikes, said it will now fully absorb all costs associated with the 25% tariff imposed on ebikes since August 2018.

Returning to their original pre-tariff prices is a $200 difference, the company said.

Ebikes are the fastest growing segment of the bicycle market, with U.S. sales increasing eightfold since 2014 according to NPD. Ebikes are used as a car replacement, and help broaden the cyclist population by eliminating barriers associated with traditional bicycles.

A tariff threatened the future of ebike adoption and sustainable transportation by increasing the costs of ebikes to consumers. Some ebike brands are increasing prices for a second time since the tariff went into effect.

The 25% tariff was imposed on ebikes and other goods worth $16 billion in a second round of duties placed during trade negotiations between the U.S. and China.

At the time, Rad Power Bikes was able to absorb most of the impact, but was still forced to increase prices by $200.

When co-founders Mike Radenbaugh and Ty Collins announced the price increase in a candid video, thousands of customers expressed devastation that the ebikes were no longer in their budget. “We’ve been working tirelessly ever since to find a solution,” said Radenbaugh.

To fully absorb the costs of the tariff, Rad Power Bikes focused on what they could change, rather than deferring to factors outside their control. The company said it streamlined business processes, standardized components across their models, enhanced relationships with vendors, and diversified manufacturing.

These efforts allowed the company to return to their original pricing of $1,499-$1,599.

This is no doubt good news for the company’s customers.

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