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Business

Taiwan's scooter market gets electric jolt

Subsidies, local innovation spark a battery-powered bike boom

Gogoro's battery swap stations have given Taiwan's electric scooter market a big push.

TAIPEI -- The popularity of electric scooters is surging in Taiwan, spurred by government subsidies and a healthy dose of creativity. Some see the bikes becoming the island's next big export.

A record 20,915 new electric scooters were registered last year, nearly double the previous year's number. Consumers were drawn in by government subsidies, along with a quick and convenient battery exchange system devised by a local startup.

Electric models accounted for 2.5% of all scooter registrations in 2016.

On Feb. 6, Taiwan's Ministry of Economic Affairs held an event to celebrate its successful promotion of the technology. Minister Lee Chih-kung announced ambitious sales targets of 40,000 electric scooters for 2017 and 200,000 for 2021.

For comparison, only around 5,000 electric two-wheelers are sold in Japan each year, according to the Fuji Chimera Research Institute -- despite the country's population being 5.5 times larger. 

Battery swaps

Aside from the subsidies, a lot of the credit for the Taiwan boom goes to a startup called Gogoro. It was founded by Horace Luke, a former senior engineer at Taiwanese consumer electronics company HTC.

Gogoro started selling electric scooters in June 2015. Its strategy centers on a unique battery swapping system: It built a large network of unmanned stations that allow customers to exchange drained batteries for fresh ones. Many of the swapping stations are located in front of convenience stores. 

Used batteries are simply dropped into a slot, and charged ones pop out. This way, there is no need to find a socket and wait hours for a full charge.

Gogoro co-founder Horace Luke, right, puts the startup's smartphone app through its paces for Economics Minister Lee Chih-kung.

 

Gogoro has already set up some 290 swapping stations -- outnumbering gas stations in Taipei and other key parts of northern Taiwan. The company says 10,000 batteries are exchanged every day.

Gogoro's Smartscooter is just as powerful as gasoline-powered models, topping out at 95kph. It is also much smarter: The machine is equipped with numerous sensors, making it possible to check tire conditions and battery levels with a smartphone app. The app can also guide the way to the nearest battery station.

The startup has carved out a big slice of the nascent market, accounting for about 60% of all newly registered electric scooters. But it is far from alone -- local players such as China Motor are also vying for market share. To drive up sales further, the government hopes to make Gogoro's battery stops available for use by all brands.

The road abroad

The government has its eye on the global market, too. Lee, the economic minister, has expressed his wish to see Taiwanese electric scooters on streets all over the world.

The island heavily relies on its information technology sector. But with the industry facing an uncertain future due to stiff competition from China, electric scooters could provide a new source of income.

Electric motorbikes are far easier to make than electric cars. For Taiwan, this is both a good and bad thing: Easy market entry means more companies will arrive on the scene as the market grows.

In many Asian markets, Japan's Yamaha Motor and Honda Motor lead the way in electric models. Niu, a Chinese manufacturer, is dominant in its home country, while Terra Motors is riding high in Vietnam.

Gogoro is making some headway abroad. Its model has been adopted for an electric scooter sharing program in Berlin, launched last August by Robert Bosch. The German auto components company was impressed by the Taiwanese startup's unique battery solution.

As clouds gather over its economy, Taiwan is hitching high hopes to battery-powered two-wheelers. 

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