Author: Dani Horwitz, CEO, VMAX USA
As the news of CAKE’s bankruptcy filing unfolded, it became impossible not to connect the dots to the bigger picture of volatility that’s been shaking up the e-mobility world lately.
It’s been a rough ride with Superpedestrian shutting down, Bird hitting bankruptcy, and Micromobility.com — what we used to know as Helbiz — getting kicked off Nasdaq. Then there’s the merger of Tier and Dott, trying to carve out a steadier path forward, not to mention the whole VanMoof saga, ending in bankruptcy before Lavoie stepped in to buy them out.
So, what does this all mean for someone running an e-mobility business right now? Well, it’s time to take a hard look at what we’re doing. VMAX E-Scooters, with over nine years experience in Europe and a recent expansion into the US market, has not been idle. We’ve adapted our services and refined our business model in response to these market dynamics. It’s crucial to double down on a strategy that’s about growing, being profitable, and hitting the mark with what our riders expect from us. So here’s a sneak peek into five moves we’re making at VMAX USA to ride out the volatility and come out on top in 2024.
Product
VMAX USA launched in late 2023 on a mission to disrupt the electric scooter market in the USA by introducing Swiss-quality scooters. From our IPX6 waterproof rating and UL 2272 certified (tested by SGS) batteries, to our comprehensive 24-month warranty, we have always been committed to elevating the e-scooter industry’s standards. Added to that is our extremely powerful motors, unparalleled hill-climbing ability, high payload capacity, and innovative features like brake lights, blinkers, and 10″ tubeless tires. Confident in our offering, we entered the market ready to make waves.
However, the path to excellence is paved with feedback, and feedback we received. Both riders and YouTubers alike pointed out a need for speed to really make a mark in the US (being a Switzerland founded business, we had limited the speed of certain scooters to make them “street legal” according to European regulation). Rising to the challenge, we recently deployed a firmware upgrade boosting the velocity of our flagship models: the VX2 Pro scooter now surges to a maximum of 24 MPH, and the VX4 scooter has a top speed of 25 MPH. This adjustment underscores our commitment to not just meeting but anticipating market demands, ensuring our scooters set the standard in the evolving urban mobility landscape.
Price
As we continue to make important strides in increasing quality, we’re taking an equally important step: making our premium scooters more affordable. We’re excited to announce a significant price reduction of 20% across our entire range of scooters. This isn’t just a discount; it’s our commitment to offering the best value for a premium e-scooter experience.
Our approach to lowering prices stems from a meticulous evaluation of our cost structure. Originating from Europe, our pricing initially incorporated VAT, but the American market presents us with a distinct advantage. By adjusting for the absence of VAT in the U.S., we’re delighted to transfer these cost savings directly to our customers.
This significant price reduction is a testament to our commitment to offering VMAX scooters as the optimal, most budget-friendly option for American riders. Moreover, this pricing strategy is crucial for our growth in 2024, especially in light of the economic challenges and potential recession that is putting a strain on consumer budgets.
Production
Navigating through the turbulence of the e-mobility sector and broader global geopolitical unrest affecting the supply chain, VMAX is reinforcing its commitment to autonomy in production. We craft all our scooters and their components in our proprietary facility. This strategy, spotlighted by Zag Daily, guarantees our adherence to the highest standards of quality and worker rights, ensuring our e-scooters embody Swiss-grade excellence.
Our USA-based warehouse ensures we’re always stocked with scooters and replacement parts, providing a buffer against the dual pressures of industry volatility and international tensions. This proactive approach not only safeguards our operation but also underpins our ambition for continued success, positioning VMAX as a dependable name in the e-scooter landscape.
Market
Shortly after our U.S. debut last year, VMAX faced a pivotal decision: identifying our primary audience. While our heart was set on a direct-to-consumer (DTC) model, discussions with major retailers presented a tempting alternative. However, securing a position in a new market, especially one experiencing an unprecedented level of volatility – we simply couldn’t satisfy both retail partnerships and direct-to-consumer sales without making significant compromises. Catering to retailers seeking hefty margins would necessitate higher prices on our platform, thereby hindering our ability to offer unbeatable deals directly to our customers.
This realisation led us to a critical decision: prioritising our DTC model. This choice wasn’t just strategic; it was foundational, enabling us to slash our prices as previously mentioned. By zeroing in on a clear target market, we’ve positioned ourselves to hone our efforts, ensuring not just growth but stability in the dynamic landscape of U.S. e-mobility.
Profitability
The recent closures of prominent e-mobility companies come with a cautionary tale about the risks of venture capital. Cake, for instance, raised an impressive $74.4 million, VanMoof secured $189.1 million, and Superpedestrian folded just 18 months after a $125 million funding round. These figures are a vivid reminder to newcomers in the micromobility market of the risks associated with managing large sums of investment without a solid plan for profitability.
In this light, VMAX is taking a prudent approach. We recognise the importance of having a sustainable path to profitability. This strategy may temper our immediate growth rate, but it aligns with what the market, shaken by the fall of giants, now prioritises in 2024: financial stability over rapid expansion.
Concluding thoughts
As we steer through 2024, VMAX is dedicated to advancing the e-mobility sector with our blend of quality, affordability, and innovation in the electric scooter space. Our strategies for product development, pricing, production, market focus, and profitability are not just about navigating volatility—they’re about leading the charge towards a brighter e-mobility future. We’re optimistic about the road ahead, for VMAX and the entire sector, as we work together to redefine urban mobility.