Sharing electric scooters in the United States: 80percent of cars come from this Chinese company

 Sharing electric scooters in the United States: 80percent of cars come from this Chinese company

Netease Technologies News Dec. 12, according to foreign media reports, in 2018 shared electric scooters swept the United States, becoming a new darling of venture capital. Behind many start-ups, Chinese manufacturing enterprises are indispensable.

Lime, the hot electric scooter sharing company this year, recently sent a disturbing message to users that some of its equipment was in danger of fire.

After the warning was issued on October 30, the startup recalled about 2,000 electric scooters, less than 1% of its total. This is reminiscent of the scene three years ago when hoverboards, which were in full swing, withdrew from the market because of the potential safety hazard of battery fire. Will the same spontaneous combustion problem make electric scooters fade out of public view?

Picture: Gao Lufeng, founder and CEO of Narnbo, whose company has caught up with the tuyere of sharing electric scooters.

Lime blames one of its suppliers, Beijing-based Narnbo, for manufacturing defects, but the company is not an ordinary electric scooter assembler. Narnbo has quietly become the largest supplier of electric scooters deployed in American cities. The little-known manufacturer is an essential supplier for almost all companies trying to ride on the micro-mobility wind tunnel. Micro-mobility is a concept that aims to change the status quo of urban transport by popularizing cheap alternatives to automobiles and public transport.

The rise of electric scooters began last year when Bird Rides was founded in Santa Monica, California, and triggered a boom in micro-mobile devices driven by venture capital. Investors quickly invested hundreds of millions of dollars, with Lime and Bird valued at more than $1 billion, while Uber, Lyft and major automobile manufacturers launched their own electric scooter services. All this has brought more business to Narnbo. According to reports in Information and the Financial Times, Uber now sees Bird and Lime as potential acquisition targets, partly to address the problem of putting more electric scooters on the road.

We are working with all the capable players you can imagine, Narnbo CEO Gao Lufeng said in an interview. Narnbos sales of electric scooters have increased six-fold this year, he said. The company estimates that four of the five electric scooters currently in use worldwide come from its factories. However, Gao declined to disclose the total number of electric scooters delivered by the company. The six-year-old company is now valued at more than $1.5 billion and plans to go public, according to a person familiar with the matter.

Picture: Minmi founder Lei Jun tries to ride on the miniPro electric scooter manufactured by Narnbo.

The electric scooter sharing market in the United States in 2018 is surprising, and Narnbo is one of the few assemblers equipped with the expertise to mass-produce electric scooters. But as the Lime recall shows, there is a risk of becoming the largest maker of electric scooters. The Chinese manufacturers business partner seems to be at odds with helping the company further consolidate its position.

Narnbos headquarters is located in a science park in Northwest Beijing. Visitors see the exhibition area as a strange Museum from the future. The white felt pedestal is lined with an electric roller skate called DriftW1 +, a single-wheeled ball electric vehicle with telescoping legs, and a kart with a speed of up to 15 miles per hour. In addition, there is an electric car called miniPro, which looks somewhat similar to the traditional Segway electric car. On a video screen in the office, a group of slender models are dancing on miniPro.

Segway itself is part of the Narnbo line. As early as 2015, Narnbo acquired the once popular self-balancing two-wheeled electric vehicle manufacturer. From Segway in the early 21st century to suspension skateboards in 2015 to electric skateboards today, they are the same. Although enthusiasts insist that they will change the citys traffic situation, these new urban vehicles have aroused ridicule. Segways revolution has never been realized, and most of what remains in peoples memory is the novelty of equipment, or worse, a foolish fashion.

Narnbo never stopped manufacturing Segway electric cars and other short-distance vehicles, such as electric unicycles and a series of L-type electric scooters with electric engines. At first, electric scooters didnt look amazing, or even like Narnbos most promising product. They are basically adult versions of childrens toys. But profitable businesses often come from the most unlikely places.

Picture: A man uses an electric scooter on the streets of Paris.

The high office is on the second floor. Downstairs, there is a row of young people typing in front of the computer. Narnbo has about 3,000 employees, including many who work on assembly lines. The company plans to add another 400 employees next year, mainly in R&D and design. Some employees use their own equipment manufactured by Narnbo to go to work, or use these equipment to shuttle in huge parks. Gao Lufeng spoke mildly, wearing a pair of thick-framed glasses and a black casual jacket with the logo of a small white company.

Next to a polished table, there is an award from mobile phone manufacturer Millet. Mimi shares about 20% of Narnbo with its founder Lei Juns investment arm. Unlike other young Chinese entrepreneurs, Gao Lufeng, 39, has never studied in the United States or worked for a Chinese technology giant. He founded Narnbo in 2012, and by most estimates he runs the worlds largest maker of short-haul transport equipment. Gao Lufeng divides the future short-distance traffic market into five different parts, ranging from small electric scooters to air travel equipment. Our goal is to leave a footprint in all these areas, he said.

However, a serious question is whether thousands of people will use electric scooters to go to work a year later. Critics argue that the current boom in electric scooters is just a flash in the pan and will bring unnecessary risks. Many traffic accidents have resulted in a small number of deaths, as well as a wave of brain concussion, tooth loss and fracture. Lawsuits filed in California last October blamed the injuries on negligence by operators and manufacturers.

Limes recall was to some extent a claim that electric scooters were dangerous toys, but Gao Lufeng insisted that the blame should not rest with him. Three days after Limes announcement, Narnbo issued a statement denying Limes claim and warning users to consider operatorssecurity records. We prefer more professional companies to provide maintenance services, but Lime seems to want her team to do it, Gao said in a subsequent telephone interview.

Picture: Shared electric scooter startup Limes electric scooter, printed with Narnbos logo. It had a partnership with Narnbo.

Gao Lufeng refers to Limes juicer, which is an independent contractors term, referring to the company paying a certain fee for the independent contractor to recharge the electric scooter which is exhausted on the street. Gao Lufeng said that the chargers used by these contractors were incompatible with Narnbos electric scooter, which caused the problem. Of all our customers, he said, only Lime has this problem.

Even before the announcement, Lime and Narnbo were disconnected. Gao Lufeng disagreed with the controversy, pointing out that electric scooters delivered to Lime accounted for less than 10% of his shipments.

Solowheel is an electric unicycle, and product inventor Shane Chen wants people to believe in its potential.

Picture: Employees of Narnbo demonstrated the companys DriftW1 electric roller skates at the IFA Consumer Electronics Show in Berlin.

In the spring of 2014, the year before Narnbo acquired Segway, Chen said that Narnbo invited him to Beijing to discuss Solowheels cooperation. Chen was initially interested. He remembered that Narnbo had boasted that he would subvert Segway in the market. When Chen asked for more time, he said Narnbo was strong and told himself it was unnecessary.

In August, Narnbo launched its own electric unicycle, NinebotOne. They are a bit like bullies, Chen said.

Chen filed a patent lawsuit against Solowheel in the United States and China, claiming that Nanbo had plagiarized the product he designed. Chen said the U.S. case is still pending and Narnbo is appealing the ruling in favor of Chen in China. Gao Lufeng called the patent infringement charges against related products baseless, and a spokesman for Narnbo answered several controversial questions in the same language: We do not recommend that this information be included in the report.

Narnbo has been accused of producing products with obvious similarities to competitorsdesigns. Before buying Segway, Gao spent several years confronting the American company. Segway has repeatedly sued Narnbo and other Chinese manufacturers for copying designs. On one occasion, Segway tried to stop Narnbo from selling in the United States. Then in April 2015, Gao Lufeng held a press conference to discuss new investors. Towards the end of the conference, a Chinese message flashed behind him: Narnbo bought Segway.

Narnbo reportedly paid more than $75 million to acquire the company. Before that, the owner of Segway, James Heselden, fell off a cliff and died. The company changed hands with several bosses. In Narnbos view, the deal marks the shift of the Personalized Transportation Technology Center.

Picture: Segway electric scooter at IFA Consumer Electronics Show in Berlin.

Chinese companies will expand their business through independent innovation and acquisition, Neil Shen, a Narnbo investor and Sequoia Capital, said at the launch.

By the time Narnbo completed the Segway deal, the idea of sharing transportation had captured the imagination of the technology industry. Taxi service companies Uber and Droplets have become an important force, indicating that future travel does not necessarily rely on private cars. But Gao Lufeng does not have a particular view that the same economic model can also be applied to small electric bicycles. We didnt expect such a rapid growth in shared services, he said.

A former executive at Narnbo said the company was improving about 10 different models before the electric scooter boom. One product was inspired by Segways miniPro, which has no handles, so cyclists dont have elegant ways to get off. In addition, Narnbos additional handles still leave people uncertain about how to use them. At one point, the company considered selling the new products to BMW in the hope of putting them in the trunk of the car.

Earlier this year, after Gao Lufeng met Travis Vander Zanden, chief executive of Bird, Narnbos electric scooters began to appear in cities such as Los Angeles and Austin. More customers are queuing up for delivery, including traditional car manufacturers. Narnbo sells electric scooters to Spin, a recently acquired scooter by Ford, and Gao says he also supplies Lyft and Uber.

Picture: A city manager in San Francisco is putting a shared electric scooter on a truck in Lime.

Competitors are flooding into the unproven electric scooter sharing market, which means operators are putting pressure on suppliers to produce longer-lived scooters that can maintain performance in the rain and have their own features. If almost everyone who wants to launch electric scooter sharing services turns to Narnbo, operators will find that relying on the same ordinary manufacturer is a weakness. When everyone buys electric scooters from the same place, its hard for any company to claim that they have better products.

At present, Lime works among multiple suppliers. While it signed a new order with one supplier, another supplier is producing a new batch of electric scooters for it. Joe Kraus, Limes chief operating officer, said Lime had only used it to fill some market gaps before breaking up with Narnbo. Its hard to get enough electric scooters.

Thomas Yao, partner of IMO Ventures, a venture capital firm investing in Lime, believes that the electric scooter market is still struggling to cope with the shortage of supply. But as Narnbo faces new competition, these shortages may ease. Yao said there are still four high quality electric scooter suppliers in China, but he declined to give specific names. He said Narnbo still has the best product design capability and has an advantage in making small electric scooters capable of driving long distances or coping with bad weather.

Lehang World, a competitor in Shenzhen, China, said its electric scooter production grew fivefold last year. According to Zhou Wei, chief executive of Lehang World, the capacity of the two factories is about 120,000 vehicles per month. In its office on the 18th floor, there is a small room showing the companys series of electric bicycles, which look like Narnbos products. Happy World even reached an agreement with Shane Chen to build his Solowheel electric scooter.

As a smaller supplier, Zhou Wei said he preferred to tailor-made electric scooters to the needs of customers and add LED lights to the front of the car. His scooter has water-proof properties up to a meter deep, which is a useful feature for a product that is easily abandoned in public waterways. Zhou Wei said he had recently signed agreements with European and Brazilian electric scooter operators Movo and Yellow, and that next year he would work with Bird and Lime.

More suppliers mean lower prices, but diversification of production has not produced the perfect effect for Lime. Last November, an electric scooter made by Okai, a Chinese company, began to break and Lime had to recall it. In a statement, Okay said Limes claim that there were defects in its electric scooters was arbitrary and groundless.

Narnbo blames such problems on poorly equipped imitators. Thats the status quo, Gao Lufeng said. When others see that this may be a profitable business, they want to rush in. But he also does not think that Narnbos existing products will continue to be popular in the future. He is developing a bigger electric car and a product that can fly in the air. Narnbo is also developing an automated delivery robot for China Electronic Commerce Corp.

Perhaps one of these new products will become a future car. Or not. The present scene reminds Gaolufeng of how fast the business is changing. There is a familiar sight here: ofo and Mobais bicycles are lined up, and the good fortune of sharing bicycles is no longer there.

On weekdays, outside Narnbos office, several shared bicycles lay on the ground in a horizon without any attention. (Han Bing)

Source: Responsible Editor of Netease Science and Technology Report: Wang Fengzhi_NT2541