Taiwanese Market: Car Vs. Scooter

TAIPEI, Taiwan – Arriving here in the capital city, it’s immediately apparent why the locals love their motorcycles, which we would call scooters in the U.S. because most have gasoline engines displacing only 110 cc.

Meanwhile, most road-going motorcycles in the U.S. start at about 250 cc and range up to 2,300 cc.

Taipei is a fairly large city with a great subway and bus system, but sometimes you want to get somewhere quickly, on your own timetable, taking your own route, perhaps past your favorite dumpling shop. A bicycle doesn’t quite cut it in a city this size.

Sure, you could buy a car, but they make very few in Taiwan, which means you shop for an import. That’s expensive because tariffs and taxes drive up the price. Posters on several Taiwanese web forums say cars here generally are twice the price as in the U.S.

In other words, China’s expanding middle class is enabling millions of people to buy a car for the first time. The same can’t be said for Taiwan.

The market in Taiwan for more-expensive electric cars is even smaller, as the charging infrastructure is not yet in place and models have yet to win legislative approval for sale to consumers.

A few companies interviewed here at the EV Taiwan trade show describe the local economy as bad, which means affordable transportation becomes paramount, giving both electric and gasoline-powered scooters a big advantage over automobiles.

The Taiwanese government is pushing scooters with cleaner-burning engines that sell for as little as NT$50,000 ($1,659), and a small number of electric scooters can be had for similar money after government subsidies are factored in.

So it’s easy to see why Taiwan, with a population of 23 million, is home to more than 11 million scooters.

Scooters are big business here: Taiwan exported 334,621 of them in 2013 for a total value of NT$14.4 billion ($480 million). Scooter exports to the Netherlands and Colombia are up 50% this year.

For historical perspective, car production here grew from 165,000 units in 1984 to 339,000 in 2013. Meanwhile, scooter output in Taiwan ballooned from 677,000 units in 1984 to 1.1 million in 2013.

E-Scooter Market Challenged in Taiwan

To be an automotive supplier here trying to feed components for production of electric cars and scooters, mostly for export, requires corporate stamina and a diverse portfolio.

Taiwan-based Chroma ATE was founded 30 years ago and retains a healthy business in automotive testing equipment to support forays into electric scooters (14 years ago) and inverters for electric vehicles (seven years ago).

Chroma supplied the inverter for the Tesla Roadster, but a different company has the contract for the higher-volume Tesla Model S.

William Chang, assistant to the president at Chroma, says it will be many years before Taiwan has the infrastructure and legislative blessing for electric cars, which are tested in certain regions only in pilot programs for now. The government is much more interested in electric buses.

On the scooter side of the business, Chroma sells electric models under the EVT brand, as well as components such as motors, controllers and chargers.

But the products are not for the domestic market. Instead, some 80,000 EVT e-scooters (currently price at NT$105,000 [$3,500]) have been exported over the past 14 years to Europe, where they remain popular, Chang says. The company sells about 5,000 a year but has capacity to make twice as many.

Having seen so many companies fail in the initial push for EVs, Chang says Chroma will stay engaged but continue to focus on its money-making vehicle-testing equipment. “If all you want to do is focus on the EV market, no, you can’t survive,” he says.

The market for e-scooters has yet to take off in Taipei, but Chang says it might happen within the next five years.

“The charging takes too long, and the charging is not very convenient,” he says, noting most people live in apartments. Like many others, Chroma’s EVT e-scooter recharges in about six hours, yielding a range of about 37 miles (60 km).

Some domestic scooter producers, such as Kuan Mei Plastic, have designed removable battery packs that can be toted indoors for charging in a conventional wall socket, nullifying the need for a dedicated infrastructure.

Kuan Mei has been around since 1970 and started out making plastic cargo cases mounted on a rack above the rear wheel.

In 2012, the company began manufacturing complete electric scooters and now can assemble 50 a month. Sales are just getting under way for the first model, the KOlá (priced at NT$65,800 [$2,193]), and a smaller e-bike goes on sale later this year.

Like others, Kuan Mei focuses on the export market and can make 100 scooters per month. Sales representative Joy Huang says the portable 48V lithium battery, which weighs 22 lbs. (9.8 kg), will last about three years before needing to be replaced. Top speed is 28 mph (45 km/h).

Scooter Culture in Taipei

Having seen a few riders running gasoline scooters much faster at wide-open throttle in Taipei late at night, I understand how a battery-driven bike might not appeal to certain customers.

It’s interesting to see how scooters share the busy surface streets here with passenger cars, many of them taxi cabs.

There’s a great deal of order among scooter riders. They obey traffic signals and rarely weave dangerously between cars in traffic – at least not that I could see. And they often move in neat packs at the same speed, like buffalo across the prairie. Riders seem to take the responsibility seriously.

At busy intersections, Taipei has devised a clever box allowing riders to make left turns in heavy traffic.

When approaching an intersection, the rider stays in the right lane, veers out of traffic and turns into a clearly marked box ahead of vehicles waiting to cross the intersection.

When the light changes, the riders in the box are at the head of the line to cross, completing their left turn. It’s a simple, brilliant way to alleviate congestion.

My apologies if this left-turn box was invented by another metropolis, but Taipei has the concept nailed.

When – perhaps if – the time comes for electric scooters in the domestic market, hopefully Taiwanese companies gearing up today still will have an appetite for the sector.