Ford Doubles Down On Electric Scooters With New Investment
The business here is red-hot right now and it seems to be a good time for investors to jump in and enjoy their share of the pieby Sidd Dhimaan, on
The electric two-wheeler industry is suddenly on the rise with a lot of automakers partaking and investing in it; some by manufacturing, some by investing in various mobility services. Recently we heard Musk subtly indicating that Tesla may soon get into electric cycles. General Motors has similar plans as well. The latest addition to this list is the Blue Oval, which announced its arrival in style purchasing Spin - an electric scooter rental firm.
There Seems To Be a Lot Of Scope Here
Spin is a leading company in micro-mobility services and has its presence in 13 cities across the U.S. If sources are to be believed, Ford will be investing around $200 million in Spin, thus, bidding itself in the race to gain market share in an industry that is still in its infant stage.
Spin will go against the likes of Lime and Bird, the other two prominent players.
Lime, founded in 2017, has already reached a valuation of $4 billion, thanks to investments from Godfathers like Google and Uber. Bird, too, has drawn major investments lately and is valued at $2 billion.
Spin was founded by Derrick Ko, Euwyn Poon and Zaizhuang Cheng in 2017 and initially began as a dockless bicycle sharing company, but after the sudden explosion in Chinese bike sharing start-ups began to fade, Spin changed direction towards electric scooters.
Now that Ford has acquired Spin, we can see it penetrate cities and geographical locations that it couldn’t before.
Spin said it plans to expand its scooter service "aggressively" into "hundreds of US markets." The company will operate within Ford’s Smart Mobility Group, which also owns Ford’s Chariot ride-hailing service that operates in London and New York.
The Business Model
Spin, Lime, and Bird follow a simple b-plan.
They buy e-scooters from companies like China’s Ninebot for $100-$300 and equip them with a wireless internet connection.
These scooters are then rented out for short distances and short periods of time via mobile phone apps, typically at a flat rate of $1 plus 15 cents per minute.
Although a clever move by Ford, it seems a little unclear as to why Ford would acquire a slow-moving company with a meager history. Given the Blue Oval’s sheer size, it could have partnered with the manufacturer Ninebot – from which Spin purchases e-scooters - directly instead of becoming its vendor.
According to Axios, Ford paid a $100 million to acquire Spin when it reportedly carried a price tag of $40 million.
Nevertheless, the spell has been cast, and it’s time for Ford to earn its money back. The company aims to roll out scooters in more than 100 cities from 2020. Can Spin take on the likes of Lime and Bird? Let us know your thoughts in the comments section below.