Everything (financial) you need to know about e-bikes

From meal delivery drivers to people biking to work and more recently, families forgoing their second car, e-bikes are emerging as a convenient, fast and affordable option for commuting medium distances.

"If you're averaging 5000 or 10,000 kilometres a year and the majority of your trips are under five kilometres, it's very easy on a bike," says Peter Bourke, general manager of Bicycle Industries Australia (BIA).

They're particularly useful for people working in cities. "Under five kilometres in metropolitan centres is often quicker on a bike. [Then] with an e-bike [which requires far less exertion] you arrive at your destination not sweaty ... and you've had a physical workout for the day."

There are no official figures on how many people ride e-bikes in Australia, however, an Ernst & Young report commissioned by BIA found there were approximately 200,000 e-bikes in the country in 2022. Today, thanks to increased affordability, bike lanes, end-of-trip facilities at offices, and the comparatively high cost of car fuel and insurance, Bourke estimates the number of e-bikes has risen to about 250,000.

E-bikes are limited to a top speed of 25km/h and only operate when being pedalled.

The rider can select how much assistance they get from the electric motor, and can choose more power when the rider is fatigued or facing a hill. Batteries are rechargeable at home and most e-bikes can be fitted with two-person or child seats, panniers or cargo trunks for shopping.

How much do e-bikes cost?

Entry-level e-bikes start at around $2000. A quality European-made e-bike with commuter accessories can be bought for about $5000, although, like their racing and mountain-bike counterparts, high-end versions can exceed $20,000.

While the purchase price is far cheaper than a car, e-bikes are most advantageous when it comes to running costs, especially compared to motoring or public transport.

Travelling 20km a day on an e-bike, five days a week, costs about $20 a year in electricity, according to the not-for-profit Bicycle Network.

An e-bike will require regular servicing and replacement of tyres, brake pads and other parts, which costs an estimated $300 a year and lithium-ion battery replacement, recommended after five years, starts at about $400 depending on the type of battery, its capacity, brand, and place of purchase.

This is significantly less than the cost of running even a light car. The cheapest car to run - the MG3 Core light hatch - costs $746.01 a month, according to the RACV's annual car running costs survey from 2023.

The importance of insurance 

Due to their cost, it's important e-bike owners consider insurance. Many home and contents policies provide insurance for e-bikes under portable contents cover, which protects customers if they take items such as sporting equipment outside of their home and their items are lost, stolen or accidentally damaged. This may not apply if the e-bike is being used in a competitive race or time trial.

Owners are also able to insure e-bikes under general contents and home contents policies, which includes coverage for damage as a result of battery fire. At least one insurer, NRMA, says this insurance isn't priced separately.

Some lithium-ion batteries in e-bikes - usually cheaper models - have caused spontaneous fires, prompting concerns about how this could affect home insurance claims. However, a spokesperson for the NRMA said e-bike fires didn't invalidate any of its insurance policies.

This risk, however, has also prompted some strata managers to ban e-bikes and e-scooters, while others have placed limits on where they can be stored.

The Bicycle Network also provides its members with personal insurance when riding an e-bike. Riders who have paid the annual $137 membership fee are covered for non-Medicare medical costs, loss of earnings, permanent injury and replacement bicycle hire among other things.

Members are covered for up to $5 million in bodily injury and property damage to a third party.

Benefits in a health crisis

Alison McCormack, chief executive of the Bicycle Network, says e-bikes break down barriers to bike riding and encourage people to get on a bike.

And as riders age and struggle with a non-powered bike, they can benefit from the assistance of an e-bike, extending the person's 'riding life' by 10 to 15 years, she says.

The Bicycle Network argues that e-bikes should receive a tax subsidy or other incentive, as electric vehicles do, because they are a form of zero-emissions transport.

McCormack says the Network also supports riding of electric scooters, because of their health benefits.

"We like e-scooters," she says. "But we really love the health benefits that an e-bike brings because it is moderate incidental [rather than targeted] exercise, which is really important as we are facing a bit of a health crisis in Australia."

The Micromobility Report, an online newsletter promoting new forms of transport, estimated in 2022 that more than 250,000 electric scooters and personal mobility devices such as e-skateboards have been sold and are being used throughout Australia.

E-bike for business growth

Drivers in Australian cities already see many food delivery riders on e-bikes, but there are likely to be more of these deliveries in the future if overseas experience is a guide.

A 2021 study called the Promise of Low Carbon Freight, by climate action group Possible, found e-bike deliveries in busy cities were 60% faster than with vans.

In the UK, e-commerce giant Amazon is in the process of switching to e-bikes instead of vans for much of its last-mile freight, the final leg of a journey where the goods are delivered to a home or business in more built-up areas.

Renting vs buying

Another option to use an e-bike is to rent one from a company such as Lug+Carrie, which rents out a large range of bikes and accessories from $49 a week, with an option to buy.

The rental includes delivery and a 45-minute tutorial on how to use the bike, as well as insurance, servicing and maintenance.

Co-founder Ben Carr says the company is making e-bikes accessible on price - people can hire one before they buy.

It also has a rider-rescue service, where the company pays for a maxi taxi to pick up the rider and the bike if they have a mechanical problem or don't feel up to riding.

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