Pedego moving three China factories to Viet Nam?

September 11, 2018
2,020 Views

Pedego just announced that due to the Trump administration tariffs on Chinese-manufactured products, they will be moving their three factories (located near Shanghai) to somewhere in Viet Nam. I think they will actually do this, but it “might not” be because of the reasons they are stating to the public…


You cannot be involved in the bicycle industry without using some parts from a China factory, and you can easily make any ebike type with 100% of the parts coming from China.

Here is the link to the article that contains the Pedego announcement.

Can Southern California’s electric bike companies survive Trump’s tariffs?


My Opinion

Pedego is a company that was started by two close friends and business partners. They were not bicycle people who decided to get into ELECTRIC bikes. They were successful businessmen who had an expertise in globally sourcing automotive parts, and they decided that their skills and contacts had strategically placed them in the perfect position to start a successful ebike business.

But…is this just a negotiating tactic to get the Trump administration to provide an exemption for Pedego, or possibly even a tariff exemption for all Chinese-made ebikes? It’s possible, but…why couldn’t Trump ignore Pedego’s negotiations, and simply let them move a huge manufacturing supply chain from China to Viet Nam in order to have a shining example to China that his policies will hurt China? Isn’t that one of the possible outcomes that a Trump administration might want?

AND THEN!…couldn’t Trump simply add a tariff to Viet Nam-made products with the stroke of a pen? I want to be clear when I state that I am no foreign relations expert, and I don’t know if the end result in a year or two from now will be better or worse. However, the Trump administration has a record of making sudden and brash decisions. If you owned three large factories in China, would you spend millions of dollars moving them, when you could have a tariff added to the new factories next month?

 

Viet Nam is a name that evokes an emotional response because of the US involvement in the long Viet Nam war throughout the 1960’s. They are an emerging economic powerhouse and they are hungry to compete on the world stage.

 

These are guys who were constantly changing suppliers in order to get the best possible deal. Once China sees that you have become large and successful, they often begin “squeezing” you to get more profit out of you on the wholesale end. There are Chinese ebikes that are very similar to Pedego’s products, but they don’t have Pedego’s reputation for reliability, or their customer service network after the sale. Branding and reputation are vital to survive in a business that is famous for competitors copying any good idea they see. Nobody sues a company that is located in China, they would simply declare bankruptcy, and change the name on the door. Same people, same product, same building…different name.

The owners of Pedego are very savvy business managers, and if they are publicly suggesting they might move, I don’t think they are joking or just negotiating. Trump’s tariffs simply provide them with a believable scapegoat for something they were going to do anyways.

I could be wrong, but that’s my take on it. Now I’m curious why they chose Viet Nam. The guys who run Pedego (Don and Terry) are VERY good at what they do, and there has to be a reason they would announce this publicly, and why they clearly named Viet Nam. If Pedego says that they are going to Viet Nam, don’t you want to know what Viet Nam is doing that makes it worth trying out? I know I do…

 

This style of vehicle looks more like a moped/scooter than a bicycle to western eyes, but…it does have pedals, and it is classified as an electric bike in Vietnam. Bicycles have played a very important part in the culture of Vietnam for over 100 years, and now electric bikes are a natural progression.

 

The popular model shown in the picture above is the ZX-Nijia2, from the Jiangsu Zhongxing company. It has a 60V / 20-Ah battery pack, a rear direct drive hubmotor. Dual disc brakes, with flat-resistant tubeless moped tires. If your ebike is limited to 16-MPH (25 km/h) then Vietnam does not require a license, registration, or insurance.


Written by Ron/spinningmagnets, September 2018

Grew up in Los Angeles California, US Navy submarine mechanic from 1977-81/SanDiego. Hydraulic mechanic in the 1980's/Los Angeles. Heavy equipment operator in the 1990's/traveled to various locations. Dump truck driver in the 2000's/SW Utah. Currently a water plant operator since 2010/NW Kansas


2 Comments

  1. Vietnam is known for its low labour cost, friendly business set up…
    Due to labor cost increases and regulatory rules increases, there is a trend to move Chinese factories to Vietnam. On the two wheel side, from elementary part to complete products: almost ten big factories are dedicated to bicycles, some big plants for motorcycle with Honda, Yamaha, Piaggio, Kymco…

    Thailand might have been another good choice (Triumph made the move there some years ago…).

    • Thanks for that info. Harley Davidson is moving one of their motorcycle parts factories to Thailand, right next door.

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