Photo by Amelia Holowaty Krales / The Verge
Six years after opening an office in the Netherlands, Rad Power Bikes is leaving Europe to enter the regional cycling market. About 40 employees will be laid off by the end of the year, and the Seattle-based company will no longer sell e-bikes to customers in the UK and EU starting in 2024.
Instead, the e-bike company will redouble its efforts in North America, where Ladd believes the brand is strongest. Rad Power Bikes CEO Phil Molyneux said in an interview that the move was necessary to sustain the 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 that, as you know, is where we started,” Molyneux said. “And continue to focus on safety, reliability, continuous innovation, a future-oriented mindset and a desire to provide our customers with the highest quality products at an affordable price.”
The move is the latest setback for the company, which has become one of the world’s fastest-growing e-bike brands in recent years. The Covid-19 pandemic has led to a boom in bicycle sales, especially e-bike sales. Since launching in 2007, Rad Power Bikes has raised $329 million in private investment. Although the company does not disclose sales figures, Molyneux said it has more than 600,000 customers worldwide.
But Rad is struggling to maintain its position amid the economic downturn. The company has conducted four rounds of layoffs since April 2021, eliminating 100 positions. A further 63 employees were laid off in July 2022, followed by a third round of layoffs in December and a fourth round of layoffs in April 2023. The company currently has 424 employees, according to LinkedIn.
“Several rounds of troop reductions are needed,” Molyneux said. “You know, it’s a very difficult job… to make sure the company is sized for the current business outlook.”
In addition to the layoffs, the company is facing a number of other issues, including wrongful death lawsuits, property damage lawsuits, and a safety recall of nearly 30,000 electric cargo bikes due to tire misalignment.
The recall was a blow to Ladd’s reputation. The company said it received 137 reports of tires bursting, losing air and detaching from the sidewall. A total of eight injuries were reported, including five “road collisions, cuts and/or bruises, one broken wrist and one broken arm.” The parents of a 12-year-old girl who died after falling from a RadRunner bike are suing the company for negligence in a wrongful death lawsuit, highlighting the lack of oversight of this fast-growing class of e-bikes. American industry.
Meanwhile, a series of battery fires, many of them fatal, have shone a spotlight on the industry’s overreliance on cheap batteries, many of which come from China. New York, where many fatal fires have occurred, recently passed a series of laws requiring e-bikes to receive UL certification, the gold standard for safety compliance, before they can be sold legally. (No Rad bikes have been linked to any fires.)
In January, a few months after replacing founder Mike Radenbaugh as CEO of Rad Power Bikes (Radenbaugh remains chairman of the board), Molyneux sent a letter to customers acknowledging “mistakes” and promising to make improvements.
Molyneux said in an interview that the company has done a lot to strengthen its quality assurance process, in which e-bikes are tested before being sold to customers. “If we find a problem with one of our bikes, we’ll take care of it,” he said. “We talk to the customer, then develop a solution and take full responsibility for the fix.”
Rad is also seeking UL certification for its e-bike, which it plans to obtain before the New York City law takes effect in September. Rad’s current line of products has been tested to UL 2849 and UL 2271 or UL 62133, “although this is not required,” according to the company’s FAQ page.
There are very few laws regarding the safety or operation of e-bikes at the federal or state level. Some states have created incentive programs to encourage customers to buy e-bikes, and studies have shown that e-bikes are a more environmentally friendly mode of transportation that owners can use instead of traveling by car. A bill has been introduced in Congress that would provide a $1,500 rebate on the purchase of new e-bikes.
But as safety concerns grow, Molyneux said he expects and welcomes increased regulation from local governments. “It’s nice to make sure there are quality bikes coming to market,” he said. “It should be good for the industry as a whole to move forward with the momentum it needs.”
Several states, including California, have passed laws prohibiting children under 16 from riding e-bikes. Before purchasing an e-bike, Rad requires customers to confirm that they are 16 years of age or older. But Molyneux said more needs to be done, particularly in building infrastructure such as bike lanes, to ensure bikes can be used safely.
Although Rad Power Bikes has been around for almost 16 years, it is still in the early stages of its development. The company is going through the familiar cycle of rapid growth followed by rapid contraction that many other startups have experienced. But Molyneux said he still believes Ladd will win.
“We care about this industry,” he said. “We want to see this industry grow. We want to get more people on bikes – preferably Rad Power Bikes.”
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Post time: Jan-18-2024