SMALL ENGINES

Global Motorcycle Trends

E-Mobility Trends

Emissions Legislation Upgrades

Motorcycle Market

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Global Motorcycle Trends

98 million motorcycles globally
Demand expands 4.4%/yr in next 5 years
Asia Pacific region >65% of new sales
China sales decline
• Except for electric and larger ICE machines

Electric product demand will grow rapidly

• E-bikes capture market share
from conventional bicycles

Global motorcycle sales rebound

In the global motorcycle market, after a fairly flat couple of years, sales look set to rebound.

Rising personal incomes in developing nations, the introduction of high-end models in mature markets,
and the growing use of motorcycles for business and recreation are all contributing factors.

Asia Pacific markets will see growth as lower cost models provide affordable transportation.

However, in China, government restrictions1, the expansion of public transportation2 and the growing
demand for passenger cars3 means sales are expected to decline, with only electric and larger ICE
motorcycle segments growing.

The majority of new electric product demand will be for E-bikes because of increasing availability, lower
purchase and operating costs, and reduced environmental impact.

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Trends to E-Mobility
Yadea e-scooters sold in
Global E-scooter & E-motorcycle market 77 countries, including US
will grow 5 to 8% & EU, Annual global sales
>4 million units - 11.7% of
• Taxation & regulations the world total
• Consumer environmental concern
• Lower maintenance costs

Plug-in >95% of shipments

Asia Pacific largest e-scooter market

Fragmented market
• Top 5 players account for <35%
• Main players based in China –
Yadea, AIMA, Zhejiang Luyuan

Scooter image courtesy of Yadea

Growth in the global electric scooter and motorcycle market seems certain, driven by: Tax concessions
on eco-friendly vehicles, emissions regulations, consumers’ growing environmental concerns, and lower
maintenance costs.

e-Scoters will far outsell e- motorcycles and plug-in charging will be preferred to battery swapping.

Asia-Pacific accounts for most electric sales and, with strong growth in China and India, we can expect
the region to continue leading the market for some time.

However, it is currently a fragmented market and mergers and acquisitions are likely, as leading OEMs
focus on strengthening their position.

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Impact of Emissions Legislation

Upgrades
Euro 5 January 2020
• WMTC driving cycle increases challenge
• New PM limits but no PN limits
• No CO2 limits – report only

India Bharat Stage VI April 2020 – similar to Euro 5

Euro 4
5 Bharat
Euro 5 VI
CO g/km 1.00
1.14 1.00
HC g/km 0.10
0.17 0.10
Nox g/km
NOx g/km 0.06
0.09 0.06
PM g/km 0.045
-- 0.045
Evap. emissions Yes Yes
OBD OBD2
OBD1 OBD2 (2023)
Durability Lifetime
20K km 20-35K km
Lifetime

Upcoming emissions legislation in two big markets will drive hardware and lubricant changes.

In Europe, Euro 5 will tighten emissions limits for motorcycles and mopeds and introduce a new limit on
particulate matter.

Achieving these limits under the simulated typical driving conditions of the WMTC adds to the challenge.

A new lifetime durability requirement resulted in OEMs implementing OBD2 on-board diagnostics to
ensure emissions compliance.

However, there is no Particulate Number limit yet, which means particulate filters are unlikely in the
near term and there appear to be no plans to impose CO2 limits or fuel economy targets, although
OEMs are still required to report them.

Bharat stage 6 goes into effect in India on April 1st, 2020 and is very similar to Euro 5. The WMTC
driving cycle is used, but durability requirements are only 20 or 35,000 Km depending on the type of 2-
wheeler. OBD2 will be needed starting in April 2023 to monitor emissions. Since scooters and
motorcycles currently sold in India are mostly carburetted engines with two-way catalysts, it will be very
challenging for OEMs to meet these new limits.

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Key Drivers for Motorcycle

Oil Developments
Phosphorus poisoning of three-way catalyst
• Lubricant phosphorus restrictions
• In-use performance targets for catalytic convertors

No compromise on gear pitting wear performance

• Standardized evaluation test is required
• Timing for completion uncertain

The next revision of JASO T 903

• Usual 5 year cycle - 2021

One of the industry’s biggest concerns is preventing the poisoning of the 3-way catalyst system by
Phosphorus from the motorcycle oil.

Future JASO specifications may see a lubricant phosphorus limit or in-use performance targets could be
required. However, gear pitting protection is currently provided by a minimum phosphorus level. To
allow lower levels of phosphorous and not compromise on gear protection, the industry has been
working on a standardized gear pitting test, although it is still unclear when it will be finalized.

The next JASO T-903 specification update is due out in 2021. .

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Harley Plans for Action

More technologically-advanced Touring and Cruiser models

Introduce new middleweight 500-1250cc

• First adventure Touring bike – Pan America in 2020

Develop small 250-500cc for emerging markets

Leading electrification
• Pricing and pre-order for 2020 LiveWire & two new concepts announced

Images: Harley-Davidson Motor Company

Top US motorcycle producer Harley Davidson, to reverse a 10% drop in 2018 sales, is launching a

more comprehensive line-up that includes: extending its leadership in heavyweight motorcycles,

…introducing a new middleweight platform, …developing a more accessible small-displacement

motorcycle for India and emerging markets in Asia,

and leading the US electric motorcycle market with the launch of the LiveWire and the unveiling of two
new electric 2-wheeler concepts.

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The Competition is Electrifying

High-end electric models are being launched

Growing e-scooter market a potential disruptor

• Lower maintenance cost

Motorcycle oil market could feel impact

of electrification sooner than PVL

High-end e-motorcyles

Make & Model ZERO SR Lightening LS-218

Hwy Range 90 miles 100 miles

Torque 116 ft-lbs 168 ft-lbs

Top Speed 102 MPH 218 MPH

Globally, it is already a busy market with many high-end e-motorcycles, like the Zero SR with more
torque than a comparable 1,000cc sport bike or the California based Lightening LS-218 superbike
boasting a top speed over 200 MPH.

Smaller e-bikes and e-scooters, are becoming increasingly popular for short journeys and investment is
being made in charging infrastructure.

Since OEMs are jumping right to BEVs, without hybridization of ICEs, the motorcycle oil market could
feel the pressure sooner than the PVL market.

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North American User Survey Median of Survey Responses

Rider Age 50 years

<25% of riders under 35 years
Heavier viscosity synthetic motorcycle oil with
2,500 Bike Age 10 years
JASO miles average
MA friction ODI may be effectively
levels
marketed to appeal to
SAE 10W-40 / 10W-30 most a large portion of the
popular Engine Size 650 cc
biker population.
Gear and clutch protection and Bike Use 1,500 miles/year
shift performance highly valued Odometer 12,000 miles

Communicating value is key

To uncover the market trends in North America, we surveyed 1000 four-stroke motorcycle owners.

In a market that is predominantly recreational, large engine motorcycles were preferred, with Harley
Davidson and Honda being the leading brands.

Oil drains are typically triggered by mileage, oil brand is important and owners are generally more aware
about an oil’s viscosity than its quality classifications.

But, owners could use more information on how to select the appropriate viscosity grade, API quality,
and JASO friction level for their machines.

In terms of oil preferences, they tend to rank highly the attributes that motorcycle-specific oils are
formulated to deliver.

And, when it comes to performance trade-offs, shift smoothness, longer drains and gear protection
matter more than acceleration, lower price and fuel economy…which could make heavier viscosity,
synthetic oils with JASO MA friction levels appealing.

In our view, the key challenge will be how to communicate the ways tailored motorcycle oils can protect
customers’ investments, far better than passenger car oils.

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