Cheaper bikes? Place your bets

[RustyMTB]

MEP's are proposing amongst other things, a reduction in VAT for the sale, repair & rental of bikes & E Bikes. This is a proposal, not tabled legislation, so nothing concrete but assuming it happened. do you reckon your favourite friendly trans global brand will knock 20% off your next bike?

MEPs say cycling will help the EU’s green transition | News | European Parliament

The European Parliament suggests boosting cycling habits and the EU’s green transition through more dedicated cycling lanes, parking places for bikes, and reduced VAT.

www.europarl.europa.eu

 

[Doomanic]

What has an EU ruling got to do with us Plucky Brits?

 

[RustyMTB]

Well, on the face of it, not a great lot. I'm curious to know whether anyone believes if this happened, cheaper ebikes in Europe would come about. I don't think so for one second, the manufacturers would gleefully trouser free cash. Besides, it's not all about you, you know.

 

[Doomanic]

Besides, it's not all about you, you know.

It's not? When did that happen?

 

[Doomanic]

the manufacturers would gleefully trouser free cash.

Not initially, as the RRP inc VAT is well publicised so there would be an instant reduction. Over time there could be higher increases though.

 

[Expidia]

Bike pricing is no different than any other goods and services. Take oranges as an example. In the summer, when everyone wants the tasty, sweet oranges the prices for oranges rises (demand). Then in the winter when oranges are tasteless from being stored in hot house warehouses and no one wants them the price drops. When no one wants those oranges prices drop (over supply).

In the U.S. we have like 40 economic sectors and these sectors go up and down. I just filled up with gas that was $4 a gallon (mid grade) a few years ago it was around $2.25.
When a sector goes out of favor (as example Real Estate when under rising interest rates) it can remain out of favor for like a 3-5 year stretch (unless it's ocean or lake front property).

All of our economic sectors are under the Irrefutable laws of supply and demand. Another example of how prices can go quickly up and down is when the retailers will raise their prices on big screen TV's just before Xmas or the Superbowl. Or how gas prices, airline tickets always rise just before holiday driving/flying etc

So Ebikes are no different. Now that Covid has wained and people are getting back to their normal life style getting back to sitting on their couch watching TV again bike prices will drop due to "over supply". I'm seeing 20% MSRP cuts to some popular quality names already. But as demand increases before the Spring biking season begins in the U.S. they will jack up their prices again (demand).

We probably won't see huge pricing drops on the higher end bikes as they can hold demand up by cutting back on inventory and making models scarce. That happened to me when I had to make a 5 hour round trip to a Trek store 2.5 hours west of me, so I had to pay MSRP (demand).

They are already over stocked (over supplied) with the middle and low end ebikes so those prices will drop but the high end bikes I don't see them dropping so fast. For the same reason car buyers are willing to pay up $10,000 plus for cars like BMW's and Audi's etc over other priced cars. There will always be a niche market for people that can afford high end ebikes and luxury cars.

All these Chinese imports are going to force middle and lower end ebike prices down especially when gas prices drop again it may cause a 5 year long drop in bike prices as people take to their couches again. But then again, if electric bikes gain in popularity (like Tesla's and other electrics are) ebike prices will rise again.

Pricing will always be a factor of "supply and demand".

Want to save money then buy a new expensive ebike when their prices get hammered, but who wants to potentially wait 3-5 years for that to happen? True, I had to pay MSRP back last July, but past two days it like 63 degrees here in the U.S. Northeast in mid Feb yet and I got to clock 34 miles over those days . . . not too shabby for Feb and now there are only 11 days left of Feb

 

[steve_sordy]

The headlines are about a VAT reduction, not removal. But if they did remove 20% VAT, then for well over £1000, many would be day tripping across the channel and doing their own imports. Like the booze cruises of old! A quick trip around a local mud pit and the bike would come back looking well used.

 

[Paulquattro]

I just filled up with gas that was $4 a gallon (mid grade) a few years ago it was around $2.25.

$4 a gallon i wish

 

[Expidia]

$4 a gallon i wish

My son said to me 2 months ago "gas prices will never go down again". Yet last month, we drove to Florida for a vacation and I was seeing regular prices as low as $2.51.
When Trump was president, in less than 4 years he made the U.S. energy independent and gas prices plummeted down to around $2 a gal. Not in NY or California of course . . . as they stick it to us by adding in their state taxes to every gallon.

 

[RustyMTB]

Not remotely convinced retailers will display any altruism towards customers, here's what happened with e-books.

How publishers lobbied to abolish VAT on ebooks, costing the taxpayer £200m, but kept the benefit for themselves

20% VAT applied to ebooks until May 2020 - then it was abolished. Our analysis of ONS pricing data shows no evidence that any of the VAT saving was passed to consumers; it was retained by publishers or (more likely) retailers.

www.taxpolicy.org.uk

 

[steve_sordy]

$4 a gallon i wish

The UK gallon is 20% larger than the US Gallon, so it's really $5. That is still cheap of course!
The UK gallon is currently at £1.48 per litre for E10 petrol, so £6.59 per UK gallon or $7.91/UK gallon.
At $5 vs $7.91 US gas is "only" 37% cheaper than UK petrol.

But I'm confident that the UK government spends all their petrol tax revenue very wisely.

 

[Paulquattro]

But I'm confident that the UK government spends all their petrol tax revenue very wisely.

Yeah i realised the us and uk gallon was different but still a fair margin even as you said working out current rates
And im sure they spend our hard earned very wisely LOL

 

[K78]

Ridiculous.

UK/EU are in such a mess they need to increase VAT.