Dec. 16 (Bloomberg) -- Lead battery demand from China, the world's largest metals consumer, may fall as new vehicle standards reduce electric bike production, said the China Electrical Equipment Industrial Association.
The government's rules limiting speed and size of "e- bikes" may lead to closures of small producers next year and limit growth at big ones, Yi Xiaobo, secretary general of the association's lead-acid battery department, said in an interview.
China, the world's third-largest economy, has seen a surge in e-bike sales in the past decade because it's affordable and requires no driving qualification or formal license. The e-bike market in China accounted for more than 20 percent of lead consumption, according to Barclays Capital. The metal has more than doubled in London this year on record imports by China.
"We expect battery demand from e-bike production to shrink next year and competition in the replacement market to intensify," Yi said by phone from Shenyang, Liaoning province yesterday. Batteries need to be replaced every year, Yi said.
China's Standardization Administration said this month that e-bikes cannot go more than 20 kilometers (12 miles) per hour and must weigh no more than 40 kilograms (88 pounds). Electric motorbikes, or scooters, should travel at between 20 kph and 50 kph and can be more than 40 kilograms in weight, the agency said in a Dec. 6 statement.
Electric bicycles, or e-bikes, are traditional pedal- powered vehicles with a small motor attached. Scooters are larger and powered solely by an electric motor. Lead gained 0.2 percent to $2,365 a ton on the London Metal Exchange at 10:11 a.m. in Shanghai.
Manufacturers of e-bikes have been making the vehicles bigger and faster to enhance competitiveness. Industry officials had been advising the government to raise weight standards to 48 kilograms from 40 kilograms, Yu Shiguang, secretary general of the Shanghai Bicycle Industry Association, said in 2008.
The e-bike industry is asking for a postponement of new standards which favor larger electric motorbikes, China Business News reported last week, citing Lu Jinlong of the China Bike Association.
"The chance is small that the government will make any big concessions any time soon," Yi said, adding he believes e-bikes do need to be smaller to ensure road safety. Almost 90 percent of the 110 million e-bikes on China's streets exceeded the government limits, he said.