China May Allow Bigger, Faster E-Bikes This Year (Update1)

April 19 (Bloomberg) -- China may announce rules to increase the weight and speed of electric bicycles this year, helping stabilize lead battery consumption from the industry, said Niu Qin, head of general affairs at the China Bicycle Association.

"We feel quite positive" that the authorities may loosen restrictions for e-bikes, Niu said in an interview in Beijing today. Speed and weight are limited to 20 kilometres an hour and 40 kilograms. Bikes are usually powered by a 10-15 kilogram battery, with a lead content of about 9 kilograms, he said.

Larger, faster vehicles may boost demand for lead used in batteries, helping extend a 53 percent gain in prices on the London Metal Exchange in the past year as China boosted imports. The e-bike market in China accounts for more than 20 percent of the country's lead consumption, according to Barclays Capital.

"Stable e-bike output is bullish for lead batteries," Ni Yaoxiang, chief metals analyst at Guojin Futures Co. said in an interview. "But we also need to see the other side of the coin that with lead prices having climbed so much, replacements for lead batteries, such as lithium, may make a breakthrough technologically and gain more usage commercially."

Authorities said in December they were considering limiting speed and size of e-bikes for road safety. E-bike sales in China have surged in the past decade because they are affordable and don't require driving qualifications or a formal license.

China produced 23.7 million e-bikes last year, and output may stay above 20 million in the next three to five years as more sales are expected in the countryside and inland regions, Niu said.

China surpassed the U.S. as the world's largest auto market last year after the Asian nation's government halved the consumption tax on small vehicles, sending automobile sales up by 46 percent. Passenger car sales jumped 76 percent to 3.52 million units in the first quarter, the China Association of Automobile Manufacturers said this month.