Core Viewpoint - The electric two-wheeler market in China is evolving rapidly, with a shift towards high-end, smart electric vehicles that appeal to younger consumers, despite rising prices and concerns about the necessity of smart features [1][4][6]. Industry Overview - As of 2024, the number of electric two-wheelers in China has exceeded 350 million, indicating a significant penetration rate with an average of one vehicle for every 3-4 people [7]. - The demand for smart features is growing, with 76.4% of consumers aged 18-25 prioritizing smart functionalities when purchasing electric two-wheelers [4]. Company Performance - Niu Technologies, known as the "Tesla of two-wheelers," has seen its sales grow from 80,000 units in 2016 to over 1 million in 2021, but faced a decline in revenue and profit in 2022, with a revenue of 3.169 billion yuan, down 14.5% year-on-year, and a net loss of 49.46 million yuan [11]. - In the first half of 2025, Niu Technologies reported a revenue of 1.256 billion yuan, a 33.5% increase year-on-year, and a net profit of 5.9 million yuan, marking a turnaround after 13 consecutive quarters of losses [11]. - Ninebot, a competitor, achieved a revenue of 11.742 billion yuan in the first half of 2025, a 76.1% increase, with a net profit of 1.242 billion yuan, reflecting strong market performance [12]. Market Trends - The introduction of new national standards for electric bicycles in September 2025 is expected to benefit high-end brands like Niu and Ninebot while potentially disadvantaging lower-cost competitors [13][14]. - The average selling price (ASP) of Niu's products has decreased from over 4,900 yuan in 2019 to around 3,200 yuan in 2024, indicating a strategy to penetrate the mass market [14]. Consumer Sentiment - There is growing consumer frustration regarding the rising costs of smart features, with subscription service fees for Niu's smart services increasing from 38 yuan per year to 69 yuan per year [15]. - Reports of service issues, such as connectivity problems with Niu's smart features, have led to negative consumer sentiment, highlighting the importance of ongoing service quality in a competitive market [17]. International Expansion - China has become the largest exporter of electric two-wheelers, with exports reaching 20.63 billion yuan in the first seven months of 2024, growing over 9% year-on-year [18]. - Niu Technologies aims to expand its international presence, focusing on markets in the U.S., Europe, and Southeast Asia, despite overseas revenue accounting for only 8.2% of total revenue in Q2 2025 [20]. - Ninebot has already established a strong foothold in international markets, with overseas revenue contributing 37.7% of its total revenue in the first half of 2025 [20].