Rad Power Bikes Files for Bankruptcy in Major Blow to E-Bike Industry

Rad Power Bikes has filed for Chapter 11 bankruptcy protection. The major e-bike brand made the filing on Monday, December 17. It plans to continue operations while seeking a sale. The news was first reported by TechCrunch.

This marks a dramatic fall for what was once North America’s largest electric bike company. The filing comes weeks after internal warnings of a potential shutdown. The company aims to find a buyer within the next 45 to 60 days.

Financial Strain and Failed Rescue Efforts

The company’s bankruptcy paperwork reveals stark financials. It lists $32 million in assets against $73 million in liabilities. A significant $8 million of that debt is owed to U.S. Customs for unpaid tariffs.

According to the report, a last-minute deal to save the company collapsed in November. This followed years of turbulence, including multiple rounds of layoffs. A new CEO was brought in earlier this year to steer a turnaround.

Broader E-Bike Market Challenges

Rad Power’s collapse is part of a wider industry shakeout. The pandemic-fueled boom in e-bike sales has sharply cooled. Other prominent brands like VanMoof and Cake have also undergone bankruptcy restructuring.

A recent safety warning added to the company’s troubles. The Consumer Product Safety Commission warned of fire risks from older Rad batteries. The company disputed the agency’s characterization of the danger.

This bankruptcy filing underscores the precarious state of the post-pandemic micromobility market. The future of Rad Power Bikes now hinges on a successful sale process.

A quick knowledge drop for you

What does Chapter 11 bankruptcy mean for Rad Power?

Chapter 11 allows a company to restructure its debts under court supervision. For now, Rad Power Bikes will continue to operate its business. The goal is to sell the company as a going concern.

Can customers still get support or repairs?

The company states it will continue operating in the ordinary course of business. This implies support and sales should continue for the time being. The long-term outlook depends on the outcome of the sale.

What caused Rad Power Bikes to fail?

Several factors contributed. These include cooling consumer demand, significant financial debt, and a failed rescue deal. Unpaid tariffs and a costly shift in business model also played a role.

Is the entire e-bike industry in trouble?

Not necessarily, but the sector is correcting after a period of rapid growth. Several well-funded startups have faced similar financial strains. Established brands with diverse product lines appear more stable.

What happens to the company’s employees?

Employees remain with the company as it continues operations during bankruptcy. Their long-term status will be determined by the new owner if a sale is completed. Previous layoffs had already reduced the workforce.