TL;DR: Why Did Rad Power Bikes Fail and What Entrepreneurs Can Learn?
Rad Power Bikes collapsed under tariffs, financial mismanagement, and market shifts, filing for bankruptcy in December 2025.
• Economic pressures: Trump-era tariffs on Chinese parts soared to 55%, inflating costs for Rad Power Bikes and others.
• Market missteps: A pandemic demand surge led to overproduction, leaving warehouses overstocked as demand dropped.
• Revenue plunge: Annual earnings fell from $129.8 million in 2023 to $63.3 million in 2025, with debts piling up.
Key lessons for entrepreneurs: Scale production responsibly, diversify supply chains, advocate for policy change, plan for downturns, and maintain healthy cash flow. Adapt, thrive, and grow with market shifts to secure your business’s future amidst uncertainty.
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In recent years, the electric bike industry witnessed exhilarating growth, but by 2025, a storm of economic pressures brought some of its most promising players, such as Rad Power Bikes, to the brink. As a European entrepreneur, I see this as more than just a U.S. industry story, it’s a stark reminder of how policy, financial planning, and consumer trends impact businesses universally. Let’s dive into the factors that led to Rad Power Bikes filing for bankruptcy and distill the lessons every entrepreneur can learn from their trajectory.
Why Did Rad Power Bikes Collapse?
Rad Power Bikes, once a pioneer in the U.S. e-bike space, declared Chapter 11 bankruptcy in December 2025. The Seattle-based company had grown significantly during the pandemic, capitalizing on a meteoric rise in demand for affordable e-bikes. However, as demand faltered and tariffs on Chinese imports increased, the company’s financial foundation eroded. Its largest debt? An unpaid $8.3 million bill owed to U.S. Customs for import tariffs, accounting for its most substantial unsecured liability.
What Role Did Tariffs Play?
The Trump-era tariffs, continued under the Biden administration, imposed hefty duties on Chinese-made goods, including e-bike components. Initially manageable, these tariffs spiked from 11% to as high as 55% after exemptions expired in 2024. While these aimed to promote domestic manufacturing, ironically, they squeezed U.S.-based companies like Rad Power Bikes, which relied heavily on imported parts. They were caught in a high-cost cycle while competing against cheaper imports from large foreign retailers who could absorb these costs more effectively.
- Unfair competition: Global marketplaces selling directly to U.S. customers bypassed some costs, adding to the challenge.
- Policy instability: Rad Power Bikes, like many firms, struggled to adapt to fluctuating trade regulations, impacting their strategic planning.
This wasn’t a unique problem to Rad Power Bikes; entire segments of the U.S. e-bike industry have faced similar circumstances. Competitors like E-Cells and Kent International also cited rising tariffs as direct factors in their closures.
The Bigger Picture: Industry and Market Shifts
The broader e-bike market, while lucrative, has its cycles of highs and lows. During COVID-19, demand surged almost 300%, and companies ramped up production to meet the spike. Unfortunately, when pandemic-era consumer enthusiasm dwindled, many manufacturers, including Rad, were left with overstocked warehouses. Rad Power Bikes, once projected as the leader of casual-use e-mobility solutions, saw its annual revenues nosedive:
- 2023: $129.8 million
- 2024: $103.8 million
- 2025: $63.3 million (YTD)
Combine that with razor-thin margins and ballooning tariffs, and you have a recipe for financial disaster.
How Did Industry Policies Contribute?
U.S. tariffs collected a staggering $200 billion in duties by 2025. While this was touted as a measure to enhance domestic production, it lacked foresight for industries reliant on imported components. This flawed approach created systemic inefficiencies and raised prices for end consumers, leading to declining sales. As a European entrepreneur, it’s troubling but familiar, short-sighted economic policy has sunk more than a few companies here as well.
What Can Entrepreneurs Learn From This?
This isn’t just a story of tariffs or financial mismanagement. Rad Power Bikes offers lessons that can serve every founder wrestling with the unexpected.
- Don’t double down on temporary demand: Rad Power Bikes scaled production aggressively during a pandemic-fueled boom but failed to adapt when demand eased. Focus on building flexibility into your supply chain and scaling responsibly.
- Diversify your supply chain: Overreliance on Chinese-made components exposed them to tariff-induced cost hikes. While shifting production isn’t immediately viable for all, actively exploring diverse sourcing options can de-risk your operation.
- Advocate for policy change: Trade barriers are daunting, but industry coalitions can lobby policy-makers for exemptions or adjustments. Entrepreneurs have more power in numbers.
- Always plan for the “what-ifs”: Economic shocks are inevitable. Maintain financial cushions and adaptive strategies to weather crises.
- Control your cash flow: Rapid revenue declines paired with high debts are a deadly mix. Regularly revisit financial models and assess whether scaling efforts remain viable.
Examples of Pivot Strategies
If pivoting feels risky, look to proven strategies. European player VanMoof, at one time, faced steep headwinds but shifted focus to direct consumer engagement and product upgrades tailored to core customers. Similarly, examining Rad Power’s missteps reinforces the importance of growing at a sustainable pace.
Final Thoughts: Adapt and Thrive
Rad Power Bikes’ fall underscores the need to remain agile, argue for practical trade policies, and balance growth when the market feels unpredictable. As founders, our job isn’t just delivering value; it’s navigating complex policy and fiscal landscapes that continuously evolve. Above all, we need to choose strategies that preserve not only our profitability but our vision. Let’s build businesses that can thrive amidst uncertainty, one strategic decision at a time.
FAQ on Rad Power Bikes Bankruptcy and Industry Context
What caused Rad Power Bikes to file for bankruptcy?
Rad Power Bikes filed for Chapter 11 bankruptcy in December 2025 due to financial challenges stemming from a significant decline in demand and tariffs on imported e-bike components reaching as high as 55% by 2024. The company’s largest unsecured debt was a $8.3 million unpaid bill to U.S. Customs for these tariffs, reflecting the pressure that U.S.-based companies reliant on Chinese components faced amid policy changes. This financial instability was compounded by overstocked warehouses after the pandemic-era boom in e-bike sales subsided. Explore GeekWire’s report on Rad Power Bikes' challenges.
How did tariffs affect Rad Power Bikes and similar companies?
Increased tariffs on imports, originally implemented in 2018 under the Trump administration and extended under Biden, heavily impacted U.S. e-bike companies. For Rad Power Bikes, tariff rates rose from 11% to as high as 55%, leading to unsustainable costs. These tariffs aimed to promote local production but ironically hurt domestic manufacturers dependent on global supply chains. Other e-bike companies like Kent International and E-Cells also cited tariffs as direct factors in their closures. Check out PeopleForBikes’ analysis of these industry policies.
Why did Rad Power Bikes’ revenue decline so sharply?
Rad Power Bikes experienced a massive revenue drop after peak sales during the COVID-19 pandemic slowed. Sales surged by 300% in 2020, but post-pandemic demand dwindled, with revenues falling from $129.8 million in 2023 to $63.3 million in 2025. The company also dealt with costly overproduced inventory and shrinking profit margins caused by rising tariffs. Learn more about this collapse in GeekWire’s feature.
Which challenges did the U.S. e-bike industry face overall?
Beyond Rad Power Bikes, the U.S. e-bike sector, once on track for booming sales during COVID-19, encountered multifaceted challenges. These included tariff-induced cost hikes, fluctuating demand, and international competition from marketplaces offering cheaper products. Unpredictable policy environments also made long-term planning difficult for smaller manufacturers and retailers. Explore the Washington Post’s industry critique.
How can future entrepreneurs learn from Rad Power Bikes’ experience?
Rad Power Bikes teaches entrepreneurs to avoid doubling down on temporary trends, such as the pandemic e-bike boom. Businesses should diversify supply chains to minimize risks from political or economic changes, scale production responsibly, and maintain financial flexibility in anticipation of shocks. Collaboration with industry groups can also lobby for more sustainable trade policies. See GeekWire’s lessons for entrepreneurs.
What steps could Rad Power Bikes have taken to survive?
Rad Power Bikes could have proactively diversified its sourcing away from tariff-sensitive regions like China, initiated tighter financial controls to manage debt, and partnered with policy advocacy coalitions to address harmful trade regulations. Pivoting towards direct consumer engagement and providing tailored e-bike solutions may have softened the impact, as seen in European companies like VanMoof. Learn about VanMoof’s pivot strategies.
Are tariffs guaranteed to hurt businesses importing from abroad?
High tariffs disrupt supply chains and drive up costs for companies reliant on imported components. U.S. Customs reported collecting $200 billion in tariffs by 2025, illustrating the scale of impact. However, manufacturers willing to explore alternative markets or advocate collectively can mitigate these challenges. This approach might promote fairer policies and better cost-saving frameworks for industries like e-bikes. Explore U.S. Customs data on tariff scales.
What role did global competition play in this scenario?
Large-scale global sellers, particularly Chinese marketplaces, had competitive advantages due to their ability to absorb tariff costs without raising prices significantly for consumers. U.S. companies like Rad Power Bikes struggled to compete, offering products at higher price points while managing tariff-related overheads and inventory backlog. Read GeekWire’s insight into global competition challenges.
Could changing trade policies prevent similar bankruptcies?
Trade policies need to strike a balance between promoting domestic manufacturing and supporting industries reliant on globalization. Rad Power Bikes' challenges highlight the shortcomings of blanket tariffs that fail to address the specific dynamics of green transportation like e-bikes. Industry coalitions and regulatory advocacy can help improve future trade measures. Explore PeopleForBikes’ call for revised trade policies.
How do Rad Power Bikes' struggles reflect broader market trends?
Rad Power Bikes exemplifies an industry-wide boom-to-bust cycle, where demand surged during COVID-19 but fell drastically afterward, leaving companies stuck with overstock and rising costs. Similar trends were observed across other small businesses dealing with supply chain shocks and policy constraints. Investors and founders must understand these trends to adapt faster. Learn more about the market shifts on Streetsblog USA.
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the “gamepreneurship” methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the point of view of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.