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Mobike mulls launch of electric bike-sharing business: report

China's bike-sharing company Mobike is mulling the launch of electric bikes, as competition with its archrival Ofo intensifies.

Mobike is looking for new investment for its planned electric bike-sharing business in the Chinese bike-sharing market, more than 90 percent of which is controlled by Mobike and Ofo, 36kr.com, a technology news provider in China, reported this week, citing a source close to the management of Mobike.

There is no specific timetable yet for the launch due to uncertainties over regulatory policy and fundraising, according to the report.

Earlier this year, Hu Weiwei, co-founder of Mobike, expressed her admiration for Elon Musk, chief executive officer of electric car maker Tesla, hinting that she might increase investment in electric bikes.

Some experts said that if electric bikes become popular, the business of car-hailing companies would be hugely affected.

Since the second half of 2016, several bike-sharing startups like Deer Bike have introduced shared electric bikes in China, but the growth momentum remains very limited.

The message about Mobike's planned launch of electric bikes comes as the two largest bike-sharing companies Mobike and Ofo are escalating their fundraising war to expand market share. Frustrated by it, Zhu Xiaohu, an important investor of Ofo, said at a recent economic forum that only an Ofo and Mobike merger could make them profitable in the future.

The cost of operating electric bikes is relatively high, with the production of an electric bike normally costing around 2,000 yuan, a Mobike employee told the 36kr.com. "The operation of electric bikes will be more affected by the road and weather conditions than the traditional bikes. And cost of battery replacement is very high," said the Mobike employee.

Considering the high costs, many investors have explicitly expressed opposition to investing in electric bikes. Li Lun, co-partner of Panda Capital, an investor of Mobike, has created a financial model, which explains that the maintenance cost of electric bikes is too high to make profits.

Besides, regulatory policy is another obstacle.

Several Chinese cities have set strict restrictions on electric bikes, with Beijing issuing a ban on the electric bike-sharing business.

In August, the Ministry of Transport and nine other government agencies published a guidance, stipulating that the Internet-based electric bike-sharing business is not encouraged.

Some analysts said that Mobike might launch the electric bikes in smaller cities first due to regulatory constraints.


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