E-drive manufacturer Bafang Electric (Suzhou) Co., Ltd. has reported a return to growth in the first quarter of 2025, a sign that the e-bike drive system market is starting to recover after two difficult years.

The company posted a 1.7% YoY increase in operating income, rising to €36.1m (RMB 300.76m) from €35.5m (RMB 295.78m) in the same period last year. This marks a shift after revenue fell from €336m (RMB 2.8B) in 2022 to €192m (RMB 1.6B) in 2023, and then to €163m (RMB 1.36B) in 2024.

The most dramatic improvement was visible on the bottom line. Net profit attributable to shareholders rose 32.1% to €2.62m (RMB 21.84m) in Q1 2025, compared with €1.94m (RMB 16.54m) a year earlier. This growth, well above the increase in revenue, points to stronger cost control and efficiency. Cash flow also improved sharply. Net cash generated from operating activities reached €2.54m (RMB 21.22m), up more than 2,134% from €0.11m (RMB 0.95m) in Q1 2024. This shows the company is converting sales into cash far more effectively than before.

Motor Production & Inventory

In 2024, Wheel hub motors recorded production of 878.6k units and sales of 857.4k units, marking YoY growth of 17.09% and 11.76% respectively, though inventories rose by 41.93% to 44k units. In contrast, mid-drive motors showed declines, with production at 174k units (down 25.9%) and sales at 167.8k units (down 32.2%), leaving 21.7k units in stock, a slight 1.01% decrease. Meanwhile, integrated wheel motors had the highest volumes, producing 1.96m units and selling 1.89m units, but both figures fell significantly YoY (-35.17% and -37.84%), with inventory at 40k units, a 1.94% decline.

A Turnaround Built on Efficiency‍

During the market slowdown, Bafang focused on spending less. The company cut R&D costs by 33.0% and lowered administrative expenses by 14.4% compared to Q1 2024. These disciplined adjustments helped the company navigate the industry's inventory correction phase and are now contributing to improved profitability.

Recovery Expected Beyond 2025‍

In its 2024 financial report, Bafang noted that the European market was held back by inflation, geopolitical issues, and slower consumer demand. The company expects that excess inventory in the industry should ease during 2025, after which the European market is projected to continue on an upward path through to 2030, in line with forecasts from CONEBI.

Bafang also notes that while the US e-bike market experienced significant year-on-year growth with China as a primary import source, "the volatility of US trade policies" creates uncertainty for future development.

Policy Support in China‍

While the international markets are expected to recover, a significant potential catalyst is also emerging in Bafang's home market. A revised national e-bike standard, set to take effect on September 1, 2025, will raise requirements for product quality and consistency, which may benefit established manufacturers like Bafang.

The report also pointed to government initiatives aimed at stimulating consumption. A nationwide trade-in program, first introduced in 2024 and extended into 2025. Between January and February this year, it supported over 1 million trade-ins worth about US $370m. By mid-2025, sales through the program reached 8.47m units, more than six times last year’s level.

Together, the stricter standard and subsidies are expected to drive a wave of replacement demand in the world’s largest e-bike market.

While the road to full recovery is ongoing, Bafang's first-quarter results provide a strong signal that the worst may be over, setting the stage for a potential return to growth.