The sport of cycling has, since James Moore won a 1,200-meter race in 1868 at the Parc de Saint-Cloud, been dogged by the willingness of riders and their minders to administer stimulants or other medical products to gain an advantage. Riders doping strategies have come a long way from the consumption of cocaine, caffeine and strychnine cocktails to the more modern techniques of altering blood composition. A rider’s heart and lungs are typically referred to as the “engine”. To-date, there have been no biological advances to provide an extra engine within the body. However, engineering has provided riders with the opportunity to engage a “second engine”. The term given is “mechanical doping”. The practice is simple – a small electric motor, along with a battery is secreted within the frame and connected to the drive mechanism providing the cyclist with assistance at opportune moments in a race.

While electrical assistance is a black art in racing circles, it is visibly flaunted on the cycle-superhighways and bridleways frequented by commuters and off-roaders respectively.

E-bikes, Pedelecs, EPACs – call them what you want – sales of electrically assisted bicycles are growing faster in than e-vehicles. Electrical assistance can allow the commuter to arrive at the office with no more perspiration than his bus-riding colleague. Add electricity to a mountain bike and the rider arrives at the top of the hill ready to enjoy the fun part. A twist of the grip and the snow-haired clubman can keep up with millennials on the Sunday café run.

Specialist e-bike retailers are emerging. Likewise, new brands are appearing with designs ranging from the bold and attractive through utilitarian to vulgar attacks on the senses.

All very interesting, but what relevance to the global investor?

The bicycle market grows by around four percent per annum. Growth tends to be strongest in markets where the bicycle is accepted for its utility. The addition of electrical assistance can only viewed as attractive for the cyclist wishing to get from A to B with minimum of fuss. It seems inevitable that e-Bikes will be an important growth driver for the bicycle industries.

What are the differences between a standard bicycle and an e-Bike? Not much. An electric motor is attached to the chain-set (the front drive mechanism between the pedals) to which a rechargeable battery is connected. The battery is simply bolted to the bicycle frame. A controller on the handlebar is connected by cable to the motor. Electric motors and batteries are made by made by companies such as Yamaha and Panasonic, any marginal demand from e-Bikes will be welcomed but is unlikely to result in sea change for these companies. Bicycle assembly is a low-margin game. Component manufacture is more profitable and there is one component manufacturer that produces equipment at all price points and also produces an integrated component set for e-Bikes. This company is Shimano and it is held in the Cerno Global Leaders portfolio.

Away from investment, the development of e-Bikes provides plenty of food for thought. The application of power assistance to a pedal cycle is not a new concept – recall that the Deliveroo and Uber Eats delivery people arrive on a Moped – (Motor-velocipede). In 1912, a company called Douglas slotted a single cylinder petrol engine into the diamond of a bicycle frame. Ultimately, mopeds have morphed into low powered motor-bikes and are regulated as such – tax, insurance, MOT, licence, helmet, restriction to roads all apply and stand in the way of free movement. The e-Bike, by contrast, is lightly regulated. Provided the power unit is limited to 250 watts and the power cannot be used above 15.5mph, an e-bike can be freely purchased and ridden from the shop by anyone over the age of 14 on any path open to bicycles. Will the electrically assisted bicycle morph into the electric motorbike and how will regulation develop?

The bicycle provides many people with their first taste of independence, will the addition of a bit of electric juice change the ability of free-rider to enjoy the wind in their hair?