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A win for Australian manufacturing, innovation and all cyclists

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5% duty free concession on E-bikes revoked. Win for Australian manufacturing, innovation and all cyclists.

Yesterday the The Federal Department of Home Affairs approved Stealth Electric Bikes objection to the duty free import of some Electric Power Assisted Bicycles into Australia.

The concession has been in place since 2010 and allowed foreign made Electric Bicycles from non Free Trade Agreement countries to be brought into Australia duty free, providing an instant 5% discount to all importers. This may have taken the BIA by surprise but the objection was publicly published information.

Stealth understands that this decision is seen as controversial by many in the bicycle industry and would like to briefly explain our actions.

Firstly, for the past ten years Stealth Electric Bikes have worked hard to forge a path into the E-bike industry which has led to worldwide recognition of our products. From day one, Stealth made a commitment to Australian industry to carry out all R&D and manufacturing in Australia utilising the expertise of Australian engineers, sub-contractors and employees. Our aim has always been to provide the highest quality bikes at the most competitive price possible. We encourage all bike use, on road off road and everywhere in between.

Australian Manufactured Stealth F-37

With our flagship bike the Stealth B-52, capable of reaching speeds of up to 80km/h, we originally focused on the high-powered off road market. As Stealth grew so did the E-bike industry, and we responded. In 2017, we released our first road legal pedelec commuter bicycle, the Stealth P-7 retailing from $6,990, great value for a bike of this caliber.

As with all Stealth products, our aim was to offer the P-7 at the lowest price to the market to allow equal competition with our foreign counterparts, but unfortunately the playing field in the Australian bicycle industry was a little unbalanced.

Large manufacturers of E-bikes mass produce their bikes in countries where employee wages are up to 75%* less than in Australia. In addition, all engineering and R&D is carried out offshore adding no new technology or innovation value to the Australian economy. Whilst off-shoring is also available to Stealth, we prefer to support Australian workers and the wider socioeconomic benefits this brings.

To add some perspective, for an Australian company to export a product (such as an e-bike) into any EU bound country, the effect of local taxes and duties can add up to 29% to the original cost of the product. At a maximum rate of 10% GST + 5 % duties for products imported to Australia, consumers are let off lightly.

According to a Ride Media source, the Federal Government is set to receive around $50M revenue from this tax. Stealth understands one of the key objectives of the BIA is to promote the use of all bikes in Australia, to get people out of cars and onto bikes.  One way to do this is to build better cycling infrastructure across country.  Building infrastructure requires money which the government doesn’t have. With every cyclist making a small contribution, the benefits could be massive.

Importers of foreign made bikes are arguing the new 5% tariff will cause the demise of the E-bike industry and increase prices for the end user. Instead they should question the larger benefit to Australia in terms of employment, R&D, innovation and potential new infrastructure for all cyclists.

Rather than using scare tactics to discredit Stealth, we invite the BIA to work with us, to ensure any funds raised from this new tariff are channeled into the promotion of cycling and infrastructure for all cyclists. Stealth encourages more bike users and sales for all. Large multinational conglomerates have had their time in the sunshine, now it’s time for them to contribute more to Australian cycling industry.

* Source: https://www.ridemedia.com.au/features/tariff-on-e-bikes-detrimental-to-cycling-industry/www.tradingeconomics.com/taiwan/wages-in-manufacturing/forecast