Electric Bikes Gaining Traction

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So far, Pizzi hasn't heard of any change of plans among retailers. "For the most part, the motivation to bicycle isn't solely the gas price," says Jennifer Dill, director of the Center for Transportation Studies at Portland State University and an avid biker herself. "It just can be a much more enjoyable commute. You see people in their front yards, and you feel more connected to your surroundings."

Major bike brands including Schwinn have jumped into this market, to compete with Chinese firms and high-end startups. They've helped improve e-bikes' battery life, acceleration speed, and charge-up time. Bruno Maier, executive vice-president for marketing at Cannondale Bicycle, the maker of Schwinn-brand bikes, expects his company's U.S. e-bike sales to jump fivefold between August 2007, when Cannondale introduced its first electric bike, and next year—faster than sales in any other bike category. To meet anticipated demand, the manufacturer plans to double its investment in e-bikes in 2009 and to establish a separate product group focused on the motorized models.

Kits to Convert Ordinary Bikes

Other high-end manufacturers report long waiting lists for their gear. Boulder (Colo.)-based Optibike puts out 24 limited-edition bikes a year, featuring custom paint jobs and gold-plated motors. Founded in 1997, the company has already pre-sold half of its 2009 limited-edition models, priced at $14,000 apiece. "November was our best-selling month of the year so far," says Optibike Marketing Director Craig Weakley, who notes that buyers aren't deterred by the falling price of gasoline. "People are still looking to the future," he says. Last spring, the outfit moved from a 2,000-square-foot shop into a 13,000-square-foot facility to meet mounting demand.

EcoSpeed, a Portland (Ore.) company, makes kits costing $2,500 to $3,500 that convert recumbent bikes into motorized machines. The company plans a new product lineup for next year, including kits that convert ordinary, upright bicycles. It expects 100% growth this year from last year, says Brent Bolton, president of EcoSpeed. The company is likely to sell 100 kits, which include electric motors and related parts, in 2008.

After seeing e-bikes at work during a visit to China in May, Wakefield Gregg has been trying to scrape together funds to open up a specialized electric bike shop in Portland, Ore., considered the most bike-friendly U.S. city. He is still more than $40,000 short. "I just can't get funding," he says. So for now, just like Jamerson, he contents himself with zipping around Portland on his electric contraption, the eZee Torq electric bike from eZee Kinetic Technology. "I've never driven to buy groceries," he says. And he doesn't plan to start now.

Kharif is a senior writer for BusinessWeek.com in Portland, Ore.