eBike Update

Drive Oregon-April 16, 2014

Agenda

• Company

• Market

• Technology

• Customer

Demographic

Trends

Re-

Urbanization

Changing

Personal

Mobility

Advanced

Product

Technology

Huge Growth Potential

Why is now the time?

• Founded 1997 by Dr. Malcolm R. Currie, – Chairman Emeritus Hughes Aircraft

• Sold in the mass and specialty markets – Now focused exclusively on specialty

• Sells both eBikes and E-Scooters

• Largest E-Bike company in the U.S. market

• Approximately 42 employees

• Purchased in January 2012 by Accell Group NV

Company-Profile

Ownership-Accell Group NV

• Largest Bicycle Company in Europe

• Largest eBike company in western world

• 4th largest Bicycle Company in North America

• Brands include:

• Haibike • Lapierre • Redline • Raleigh • Diamond Back

• Hercules • Ghost • Winora • Sparta • Koga

Brand Story

• IZIP – IZIP™ is Currie Technologies® premium line of electric

bikes. Complete range of eBikes for varied uses.

• eFlow – Top-of-the-line technology, ride, and performance in an

ultra cool package. The E-Bike for the Urban bike enthusiast.

• Haibike - German Engineered, Top-of-the-line performance, Bosch

Center Drive, truly off road worthy.

Company Capabilities • US Market leader - More than 16 years exclusive experience

• Advanced internal technical resources for development & support • eBike Testing & development: Industrial design, mechanical and electrical

engineering

• eBike drive systems software coding and development

• After sale service – Dealer tech support and service center, spare part distribution

• Lithium battery testing, repair and after sale service

• Extensive quality control

• Retail consumer experience center

• Accell North America Support • eBike Competence Center

• eBike Service Center

Company Capabilities !

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Accell!North!America!Announces!Formation!of!Electric!Bike!Competence!and!Service!Center!

FACT%SHEET%

!

ABOUT THE Electric Bike Competence and Service Center North America (EBCC-NA)

EBCC$NA'is'a'truly'unique'resource'that'leverages'Currie'Tech’s'16'years'of'proven'experience'within'the'

U.S.'electric'bike'(eBike)'space'with'the'leadership'of'global'eBike'powerhouse'Accell'Group'(AG),'

combined'to'benefit'AG’s'North'American'arm,'Accell'North'America'(ANA).!Currie'Tech’s'experience'will'

provide'ANA'brands'and'customers'a'true'marketplace'advantage'in'obtaining'success'in'the'fast$growing'

eBike'market.'Resources'provided'include:'

• R&D!Center:'Assuring'safe'and'reliable'leading$edge'technologies'that'have'been'thoroughly'

vetted,'while'maintaining'the'highest'levels'of'performance'and'satisfying'ride$ability.'

• Industrial!design,!mechanical!and!electrical!engineering!capabilities:'Assuring'optimum'

integration'of'electronic'systems'into'a'range'of'function$specific'electric'bicycles'that'are'

uniquely'built'to'perform'to'the'pinnacle'of'U.S.'and'Canadian'standards'for'electric'assist'

bicycles.'

• Drive!systems!software!coding!and!development!capabilities:'Creating'the'“magic$carpet”'ride'

feel'through'proprietary'system'firmware'development.''

• Dealer!Technical!Support!and!Service!Center:'Vast'on$line'technical'resources,'a'highly'trained'

call'center'and'operation'specialists'will'provide'North'America'ANA'customers'with'the'highest'

level'of'support'to'assure'speedy'diagnosis'and'issue'resolution.'

• Spare!Part!Distribution!Center:'Supporting'the'product'in'the'market'with'speed'and'efficiency'

to'assure'replacements'as'needed.'

• Lithium!Battery!Pack!Support!and!Service:'Capabilities'include'testing,'repair'and'after'sale'

service'assuring'safety'and'long'life.'

Technology supplier for additional

Accell North America Brands

• Systems integration

• Technical Support

• Customer service

• Marketing coordination

We are the Complete eBike Solution

• Widest Range of Products and Price Points

• Merchandising Support

• Comprehensive Marketing Support

• National Print Advertising

• Public Relations / National Media

• Social Media

• National Road Show – Demo Sell Through Events

• Field Sales and Tech Training

What we do

US Market Overview – Current Status

• Where are they being sold today? • eIBD’s, Online, and some small qty of IBD

• What is the market size? • Pike Research and EBWR report 65-90,000 in

2012

• Currie Tech believes market is 80,000 units (+/-)

in 2013

• $90,000,000 business in the US today

• Retail ASP <$1600 (‘12) - >$2500+ (’13

YTD)

• Currie Tech – 2013 – Dealer sales up 46%

• Currie Tech YTD-up 286%

The Market

European (EU 27) Market Status (2013)

• Total Market

• >1MM Units in 2013

• Value at $2.5B USD

• ASP (dealer channel) $2,540 USD • Germany became largest market in 2012

(Surpassing Holland)

• Germany >400K units (2013)

• Higher ASP’s ~ €2000

• Fastest growth rate at ~15% per year

• Last 3 years – New younger

consumers enter market due to

improved technology and product

innovation

• Aging Boomers with discretionary

income

• Distribution has shifted from eIBD to IBD as

category has gone mainstream.

European Market Development

• eBikes began in mid ‘90’s with underwhelming products

• In Holland, Accell Group’s Sparta brand took the category

mainstream in 2004 - 2005 with the innovative Sparta ION

How it Started

Game Changers In the beginning, they can difficult to see….

Unless you are totally tuned in

Please allow us to enlighten you…

What technologies are driving the growth?

• Battery and BMS technologies

• 18650 Cylindrical cells

• 3.2 Volts per cell currently • Was 2.5 2 years ago

• Testing 3.6 currently

• Tesla uses 7000/vehicle

• Center drive motors

• Better due to weight, torque, efficiency, power use

• Been around forever

• Bosch Entered in 2010-Performance • 50% Market share in EU

• Now others entering

• Yamaha, Shimano, and Asian Manufacturers

Emerging Technology

The Mainstreaming of the e-Vehicle

Emerging Technology

What do we need to do to bring more participation? Retooling our bicycles for Aging Baby Boomers

Boomers are seeking the aura of

the outdoor cycling experience

without the arduous exertion and

discomfort.

eBikes are a perfect fit! • They are willing and able to spend the

money -- they just want to have

some fun.

• The by-product is often neighborhood

trips to the post office, bank and

grocery store, but transportation is NOT

the primary intent for most boomers.

• Motorized, but no red-tape: No

licensing, insurance, tags, etc.

Customers

What does the future look like?

Aging Demographics

•In the United States, the baby

boom generation represents 76

million people.

•On January 1, 2011, as the baby

boomers begin to celebrate their

65th birthdays, 10,000 people will

turn 65 every day—this will

continue for 20 years.

•By 2030 in the United States, about

one in five persons will be over

65.

Customers

What do we need to do to bring more participation? Changing the Urban Mobility Paradigm

Bicycles, Ebikes and other two-wheel electric

vehicles answer the call

•We must continue to do the great work we have been

doing on cycling advocacy and infrastructure but we

need much more then to simply provide safe places

to ride bikes.

•Counter objections (inner human resistance) to bike

riding:

Too many hills, too uncomfortable, too far, too slow, too

much work, too sweaty, too tired, too lazy, too many

injuries, too old, too lazy, and yes, too dangerous.

•Start using electric bikes to directly answer these

objections In Europe – eBikes have literally become the

bike industries shining star!

• Yes, there exists a more cycling centric culture,

BUT the majority of eBike sales are coming from

new customers to the bike shops, people that

have “rediscovered” the joy of cycling.

Customers

Primary Customer Trends

Demographic-Aging Baby Boomers • Just want to have fun

• Recreation

• Activity

Psychographic-Urban Dwellers • Financial

• Efficiency

• Often-Millennial

• The most exciting trend for the bike industry

Customers

What do we need to do to bring more participation? Get some of the “Used to be fun, now it hurts” group riding by using an eBike

to overcome their objections for reason of topography and inability.

Counter the negative consumer

perceptions about bike riding •I’ll get way too sweaty. Yuck.

•I’m just not physically able to ride a bike.

•You need to be an athlete to ride a bike.

•I can’t ride up these hills, or ride that distance.

This is what is happening in Europe

today!

•Biggest Growth Category

•Higher Average sale price

•Higher “Lifetime Value of Customer”

•Less Competition

Customers

Product

• The widest range of products and price points from complementary

brands ensuring the perfect eBike for every rider

One opinion To grow cycling participation we need our cities and towns to become more bike-friendly and to achieve

that, we need to get more Americans on bicycles, and any bicycle will do

eBikes are part of the solution!

More people on bikes = fewer people in cars More people on bikes = more advocates for cycling

Thank you!