Rad Power Bikes, a prominent electric bike manufacturer, has filed for Chapter 11 bankruptcy protection, signaling its intent to sell the business within the next 45 to 60 days. This development comes weeks after the company warned employees of a potential shutdown without new funding, highlighting the financial pressures facing the e-bike industry as the pandemic-era surge in demand subsides.
Despite the bankruptcy filing, Rad Power Bikes confirmed it would continue its normal operations. "This step allows us to keep operating in the ordinary course of business while we pursue the best possible outcome for the people who rely on Rad every day," a spokesperson stated. The company's primary goal is to "keep the company intact and preserve the relationships we have built with riders, vendors, suppliers, and partners."
Rad Power Bikes joins a growing list of e-bike companies worldwide that have sought bankruptcy protection as the initial excitement for the category, fueled by the pandemic, has waned. While some, like VanMoof and Cake, have successfully re-emerged under new ownership following court-led restructuring, the broader micromobility market faces significant headwinds.
The bankruptcy filing follows a turbulent period for Rad Power Bikes. In November, the company informed employees about a "very promising" funding option that ultimately fell through. Weeks later, the Consumer Product Safety Commission (CPSC) issued a warning regarding older Rad Power batteries, citing a "risk of serious injury and death" after 31 fire reports. Rad Power Bikes, however, "strongly disagrees" with the CPSC's characterizations.
These recent challenges cap several tumultuous years for the company, marked by multiple rounds of layoffs and leadership changes. Earlier this year, Rad Power Bikes appointed Kathi Lentzch as CEO, an executive known for turning around underperforming companies. Lentzch announced a strategic pivot away from the direct-to-consumer model that initially propelled the company's growth, favoring a new retail-focused approach. She expressed optimism at the time, stating, "This shift creates new opportunities to reach more riders, strengthen customer relationships, and evolve the brand in meaningful ways. [I]t’s an incredible time to come on board."
Court documents reveal Rad Power Bikes entered bankruptcy with $32 million in assets against $73 million in liabilities. Notably, over $8 million of its debt is owed to the U.S. Customs and Border Protection agency for unpaid tariffs, a claim the company has listed as "disputed." The extent to which these tariffs contributed to Rad Power's financial decline remains unclear, but it echoes similar situations in the micromobility sector. During his first term, former President Donald Trump's tariffs on Chinese imports were cited as a contributing factor to the downfall of electric skateboard company Boosted, which went under shortly after.
