Technology Rad Power Bikes is pulling out of Europe to...

Rad Power Bikes is pulling out of Europe to focus on e-bike sales in the US

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Rad Power Bikes is pulling out of Europe, six years after it first opened an office in the Netherlands to tap into the bike-friendly market in the region. Around 40 employees will be laid off by the end of the year, and the Seattle-based company will stop selling electric bicycles to customers in the UK and the European Union from 2024.

Instead, the e-bike company will redouble its efforts in North America, where Rad believes its brand is strongest. In an interview, Rad Power Bikes CEO Phil Molyneux says the move was necessary to sustain his business and achieve long-term success.

“This change really allows us to continue to set the standard for the e-bike revolution in North America, which, as you know, was our starting place,” says Molyneux. “And to continue to have a true laser focus on safety, reliability, continuous innovation, forward thinking and the ambition to provide the highest quality products at affordable prices for our customers.”

He added: “Pretty much back to our roots.”

The move is the latest setback for the company, which has established itself as one of the fastest growing e-bike brands in the world in recent years. The covid-19 pandemic caused an explosion in bicycle sales, especially e-bike sales. Rad Power Bikes has raised $329 million in private investment since its launch in 2007. And while the company doesn’t release its sales numbers, Molyneux says it has more than 600,000 customers worldwide.

The RadTrike, the company’s newest product.
Photo by Andrew Hawkins/The Verge

But Rad is struggling to hold his ground in the midst of an economic slowdown. The company has had four rounds of layoffs since April 2021, when it cut 100 positions. An additional 63 employees were laid off in July 2022, followed by a third round of layoffs in December and a fourth in April 2023. According to LinkedIn, the company currently has 424 employees.

“It was necessary to go through a few rounds of strength reduction,” says Molyneux. “It’s very hard work and, you know, something that we had to do … to make sure the company was the right size for the company’s current outlook.”

“It was necessary to go through a few rounds of strength reduction.”

In addition to layoffs, the company has faced numerous other challenges, including a wrongful death lawsuit, a property damage lawsuit, and a recall of nearly 30,000 electric cargo bikes due to misaligned tires.

The recall was a blow to Rad’s reputation. The company said it had received 137 reports of tires blowing out, deflating and separating from the sidewalls. Eight injuries were reported, including five incidents involving “road rashes, cuts and/or bruises and one report of a broken wrist and one report of a broken arm”. And the wrongful death lawsuit, in which the parents of a 12 year old girl who passed away after falling off the back of a RadRunner works bike, they sued the company for negligence, highlighting the lack of regulation for the burgeoning e-bike industry in the US.

Phil Molyneux, pictured here in 2016 when he was president at Dyson US, took over as CEO of Rad Power Bikes last year.
Image: Getty

Meanwhile, an outbreak of battery fires, many of them fatal, has cast a harsh spotlight on the industry’s over-reliance on cheaply made batteries, many of them from China. New York, where many of the most deadly fires have occurredrecently adopted one package of laws require e-bikes to receive UL certification, the gold standard for safety compliance, in order to be sold legally. (No Rad bikes are involved in fires.)

In January, a few months after replacing founder Mike Radenbaugh as CEO of Rad Power Bikes (Radenbaugh remains the chairman of the board), Molyneux sent a letter to customers acknowledging “mistakes” and promising to make improvements.

In an interview, Molyneux says the company has done a lot to improve its quality assurance process, which involves testing e-bikes before selling them to customers. “If we find a problem with one of our bikes, we own it,” he says, “and we communicate with the customers and develop the solutions and take full responsibility to make things right.”

Rad is also seeking UL certification for its e-bikes, which he expects to receive before the New York City law goes into effect in September. Rad’s current lineup has been tested for compliance with UL 2849 and UL 2271 or UL 62133, “even though it is not required,” according to the company’s FAQ page.

Photo by Amelia Holowaty Krales/The Verge

There are few laws at the federal or state level regarding the safety or operation of e-bikes. Some states have created incentive programs for customers to purchase e-bikes, encouraged by studies showing that e-bikes are a more environmentally friendly mode of transportation that owners use to replace car trips. A bill has been introduced in Congress that would apply a $1,500 rebate to a new e-bike purchase.

But with safety concerns mounting, Molyneux says he expects — and welcomes — more regulation from local government. “It’s good to make sure that quality bikes come to market,” he says. “And that should be great for the entire industry moving forward in the right dynamics.”

Several states, including California, have passed laws prohibiting children under the age of 16 from riding e-bikes. Rad requires customers to confirm they are over 16 years old to purchase an e-bike. But Molyneux says more work needs to be done, especially around installing infrastructure such as bike lanes to encourage the safe operation of bicycles.

Despite being around for almost 16 years, it is still in its infancy for Rad Power Bikes. The company is going through a familiar cycle of rapid growth followed by rapid contraction that many other startups have experienced. But Molyneux says he’s confident Rad will come out on top.

“We care about this industry,” he says. “We want this industry to grow. And we want to get more people out of the car and onto the bike, preferably Rad Power Bikes.”

Shreya Christinahttp://ukbusinessupdates.com
Shreya has been with ukbusinessupdates.com for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider ukbusinessupdates.com team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

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