Lectric, Lexus, and Culdesac: the evolution of the ebike space
Why Lectric is the Toyota of the ebike indsutry, and why their new bike is their Lexus
Today, Lectric introduced the Lectric ONE, their new premium commuter bike. The biggest bike media and influencers descended upon Lectric Avenue at Culdesac Tempe for the biggest ebike launch of the decade.The Lectric ONELet’s talk about why it’s such a big deal, about Lectric’s strengths, and about why ebikes are so key to US city improvement. The biggest ebike launch this decade The Lectric ONE, at $2000, instantly jumps to the top recommendation on my buyers guide, replacing the Lectric XP. Clean Technica called the ONE, “an absolute gamechanger for the world of affordable electric bikes.” It’s on sale today and starts shipping in May. The ONE includes a Pinion Smart.Shift, which is the gold standard bike transmission, giving both a customizable automatic mode, and a push-button semi automatic mode. Previously, you couldn’t get this Pinion Smart.Shift on a bike under $13,000. It’s hard to overstate how much of a price difference this is from what the industry considered normal. The day Lectric launched the ONE, there were said to be only 200 bikes with this Pinion Smart.Shift in the entire US, and there were 20 Lectric ONE test units at Culdesac.This shifter is the magic unlock to some vexing tradeoffs in the ebike industry. A top of the line Gates carbon belt drive is what all bikes wish they had. Belt drives are particularly low maintenance as compared to chains, but usually they have a major design trade off: you can’t use a derailleur. So you either need the bike to be single speed, or you need to use a mid-drive motor (paired with an internally geared hub). The big problem with the latter is that it pairs poorly with a throttle.With the Pinion Smart.Shift system, you can have a gearbox at your pedals, a belt drive, and a 750W hub drive motor which allows for a throttle. Now you’ve got an exceptionally reliable and low maintenance class 3 ebike (28mph) and the highest power to weight ratio in any ebike. This is an industry-leading drivetrain at an entirely new ebike price point.It was incredibly fun zipping around Tempe on launch day. I expect many people that ask for a rec to still want the lowest price recommendation. Lectric still does excellent there with its other bikes, including the #1 selling Lectric XP and the $800 Lectric XP Lite. But if your budget is a little higher, this is the best value ebike available.How did Lectric get to the top? Lectric’s two biggest strengths are its focus on the customer and excelling at the supply chain, and it turns out those are the two most important things in today’s ebike industry. If Lectric started in Silicon Valley rather than Phoenix, it would be a classic Silicon Valley entrepreneurship story. And the founders, Levi Conlow and Robby Deziel, would have fit right in at Y Combinator with their focus on making something people want. When Levi’s dad wanted a more affordable electric bike, the first Lectric bike was born. It flopped. They had thought customers wanted an ebike that looked as much like a regular bike as possible. In fact, that’s what the entire bike industry thought. Levi and Robby did lots of research, and listened to many customers. They landed on a radical new design no longer designed for the small-but-loud Spandex and Lycra crowd.That was the Lectric XP. It didn’t matter that reviewers called it ugly. (Now, I compare it to the Herman Miller chair: a beautiful expression of form following function.)Many of their initial customers were folks with RVs, so they loved that the bike was short and could fold into tight storage spaces.People loved the throttle. Many otherwise excellent industry players have seemed stubborn in the face of clear demand for a throttle. There are reasons for this, including European regulations and the aforementioned hard drivetrain tradeoffs. But people really love a throttle.Most importantly, giving customers good value has always been a top priority of Lectric. I’ve talked previously about Van Moof, which failed partly by trying to customize too much of their bikes. Lectric ended up using industry standard parts in a package that delivered superior features to Van Moof. And each iteration of the bike got better. Even today after years of inflation, they still sell the XP for $1000, a large reason it’s the best selling bike in the US. Great value comes from their excellent supply chain. Designing the bike for high quality at a great price, and then executing that plan, is something that they started learning with skateboards. And they keep iterating and learning. Lectric is becoming Toyota, and the Lectric ONE is their LexusHow did Lectric launch a bike 6.5x cheaper than the next lowest priced bike with the Pinion system, nearly getting to the proverbial “10x better, faster or cheaper,” the startup holy grail? By becoming the Toyota of the ebike industry. Toyota is an all-time great business case study—you can read up on it in basically every business book ever. By focusing on a culture of continuous improvement, Toyota built a durable competitive advantage even without a technology advantage. Perhaps it’s not a terrible shock that the ebike company that most emulates it became the top ebike company in the US.Lectric keeps raising the bar on quality and increasing scale, pushing the experience curve down and to the right. Like Toyota with Lexus, Lectric was only able to move upmarket with the ONE because of their experience building other bikes. Other ebike companies will learn from Lectric’s success. But if the past 4 years since Lectric entered the industry are any indication, they’ll keep pushing themselves forward. Culdesac and Lectric sitting in a treeLectric regularly brings the bike press and influencers to Phoenix to launch their latest bikes. Why did they pick Culdesac Tempe to launch their commuter bike?Because seeing the Lectric ONE in a neighborhood designed from the ground up for a multimodal lifestyle is like seeing it in its natural habitat. The Lectric ONE removes more of the objections first time buyers have about ebikes. More ebike sales will create more car-free Americans. And more walkable, bikeable neighborhoods make owning an ebike an even better value proposition. Lectric and Culdesac founders celebrating a mutual friend’s birthday the weekend before launch dayThere’s a millenia-long history connecting real estate and transportation. As there are innovations in transportation, real estate evolves. This goes back to the Roman roads, and then to trains putting farmland within commute distance of downtown Manhattan. Cars at first promised freedom, but eventually they created car-dependent sprawl in the US. And that made us less happy, less healthy, and less wealthy. Now, most Americans have a car that is parked 95% of the day, taxing the driver, other people using our roads, and our cities’ budgets. Culdesac is enabled by a portfolio of transportation options, allowing our residents to choose the right method for each journey. Sometimes that’s still a car: Lyft, Waymo, and rental cars provide flexibility and compatibility with today’s roads without that same 5% utilization dilemma. The reduction in parking spots allows things to be built closer together and starts a virtuous cycle.The cycle that ebikes can help breakSometimes the mode is something more nimble, or more fun and healthy. Ebikes are exactly that. Even better, ebikes expand the area of accessible jobs, restaurants, and friends to a scale where many US suburbs become navigable without a car. Ebikes are not just a simple evolution of the bike, they’re 10x better. Thanks to Lectric and the entire ebike industry for accelerating Culdesac’s mission. It was an honor to co-host the Lectric ONE launch. Come join us soon as one of the first 200 residents at Culdesac Tempe and get a free Lectric XP, or get a discount on a Lectric ONE.