Inflation and Its Impact on the Bike Industry...Price Increases Coming?

At Hi Power Cycles, we’ve always prided ourselves on delivering high-quality electric bikes with the best components for the price. For years, we’ve worked tirelessly to maintain our pricing structure, absorbing rising costs wherever possible to keep our bikes competitively priced for our passionate community of riders. However, like many industries, we’re feeling the relentless pressure of inflation, and it’s hitting the bike industry hard. Today, we want to share an honest update about how inflation is affecting our business and what it means for our customers.

The Ripple Effect of Inflation on the Bike Industry

Inflation has been a growing challenge across the global economy, accelerated wildly during COVID. The U.S. dollar has seen an average inflation rate of 4.53% per year since 2020, resulting in a cumulative price increase of 24.82%—meaning today’s prices should be 1.25 times higher than in 2020 just to remain equal. This devaluation of the USD, driven by the printing of trillions of dollars in recent years, has sent shockwaves through global supply chains. For us, this translates to skyrocketing costs for raw materials like aluminum and carbon fiber and critical components like brakes, suspension, and tires. Since 2020, we’ve seen price increases of over 50% on some key components, with most rising around 35-40%.

Over the past five years, we’ve done everything in our power to shield our customers from these rising costs. We’ve optimized our operations, negotiated with suppliers, and streamlined processes to keep our prices steady. But the reality is that these cost increases, fueled by persistent inflation and currency devaluation, are now too significant to absorb fully.

What About Tariffs?

Do tariffs affect us? Yes and no. Tariffs have made it harder to get packages in a timely manner, as deliveries are delayed until tariff fees are collected, sometimes adding days or even weeks. However, the tariffs themselves haven’t changed much for us. A significant portion of our e-bikes come from the USA for the raw materials. For bike components, most of these brands are USA based but have factories outside of the USA.  We source a good portion of our parts from our partners in Europe, Canada, Taiwan, and China, where tariffs have remained roughly stable (±5–10%). For example, China’s tariffs on e-bikes and components have been at 25% since 2020. The marginal increase in tariff fees pales in comparison to the massive cost increases from manufacturers and the rising prices of raw materials from our USA-based suppliers.

Smaller companies and end users purchasing overseas will feel the impact of tariffs more acutely, especially since the USA recently eliminated the “de minimis” exemption, which previously allowed orders under $800 to bypass customs charges.

What This Means Going Forward

Let’s be honest: inflation isn’t going anywhere soon, and it’s far higher than the reported 2–3% they claim, which affects all industries.  We’re committed to keeping price increases as minimal as possible, but the reality of inflation is unavoidable. Over the next few weeks, we’ll begin raising prices on products most affected by these cost increases, such as the Trailblazer and Revolution models. Rest assured, we remain dedicated to offering the best quality and performance for the price while continuing to manufacture and assemble as much as possible in the USA.

On a brighter note, we’ve managed to reduce the cost per watt-hour for our battery cells. Thanks to advancements in 21700 cell technology and efficiencies in our assembly process, we’re using fewer cells to achieve the same capacity as before, passing those savings on to you.

Thank You for Your Support

As one of the only (perhaps the only?) USA-based e-bike companies that manufactures in the USA, fully assembles in-house, and builds USA-made e-bike batteries, your continued support means the world to us. Thank you for riding with us, and we look forward to powering your adventures.

Have questions or concerns? Reach out to us directly at hpcbikes.com or follow us on social media for the latest updates.

The Hi Power Cycles Team
hpcbikes.com