1. Supply chain transfer and global layout
Transferring production to Southeast Asia or Latin America
Some companies have transferred production lines from China to countries and regions with less impact from tariffs. For example, after the US brand Prevelo Bikes imposed tariffs during Trump's first term, it transferred production to Taiwan, China, and then expanded to Thailand and Cambodia. However, factories in these regions still need to rely on parts produced in China and cannot completely break away from the Chinese supply chain.Chinese manufacturers also circumvent tariffs by building factories overseas, such as setting up assembly plants in Vietnam, Malaysia and other places, and taking advantage of local tax-free policies for exports to the United States.
Dispersed parts procurement
Some companies are trying to diversify the sources of parts. For example, Guardian Bikes plans to reduce its dependence on Chinese parts from 90% to 20%, and build its own frame production line in Indiana, USA, but labor-intensive parts (such as hubs and cranks) still need to rely on China.
2. Attempts at localized production
Efforts to manufacture locally in the United States
Guardian Bikes and other companies have tried to reduce costs through local production, but they face high labor costs and imperfect supply chains. The factory initially produced only 100 bikes per day, but later increased the daily output to 2,700 bikes by adjusting the production line, but it is still difficult to compete with China's efficient production.Other companies (such as Mercurio) have set up factories in Mexico, but have not been able to promote them on a large scale due to cost and technical issues.
3. Cost shifting and market strategy adjustment
Increase retail prices
Tariff costs are mostly borne by US importers and consumers. For example, distributors in Minnesota expect to see a $5 million increase in costs, which will eventually be passed on to retailers; Bend Electric Bikes' price increase due to 10%-30% tariffs has caused consumers to rush to buy before the tariffs take effect.
Some companies have maintained price competitiveness by reducing profit margins or simplifying designs, but sales may still decline by more than 15%.
Adjust product positioning
High-end brands (such as Rene Herse Cycles) have increased added value by emphasizing local assembly or design differentiation (such as Bosch's AI navigation technology) to offset the impact of tariffs.
4. Technological innovation and product transformation
Battery technology innovation
China promotes lead-acid batteries and sodium-ion batteries to replace lithium-ion batteries, both to avoid safety risks and to cope with possible export restrictions. Companies such as Yadea are accelerating the development of sodium-ion batteries to balance safety and cost.
Companies such as Bosch use artificial intelligence to optimize the functions of electric bicycles (such as route planning) to enhance product appeal.
Policy uncertainty
The period of tariff exemption changes frequently, making it difficult for companies to make long-term plans. Some expansion projects are forced to be shelved. Current policies are also constantly changing. Hopefully, there will be good news about policy relaxation soon.