As the world’s largest producer of electric bicycles, or e-bikes, China has stepped up safety regulations on this transportation tool, as part of its broader push to upgrade the multibillion-dollar industry with technology and innovation.

The move came as booming logistics development and the sharing economy are set to inject new growth momentum into the traditional sector.

China has adjusted the maximum speed requirement of e-bikes from 20 to 25 kilometers per hour on the road, according to the new regulation unveiled by the Ministry of Industry and Information Technology, and other ministries.

The government also asked companies to ensure that all e-bikes be built in a way that they cannot be modified in maximum speed, battery and weight, to prevent traffic accidents, fire or explosions caused by misuse.

Currently, the country has more than 200 million e-bikes in use, with 30 million more being wheeled out every year.

In 2016, China had about 400 large-scale e-bike companies, whose combined revenue topped 100.2 billion yuan ($15.6 billion), data from the National Bureau of Statistics show.

Gao Yanmin, director of the consumer and industrial products bureau at MIIT, said e-bikes have become an important means of transportation for daily short trips, but more efforts are needed to improve product quality and to avoid price wars.

“The new regulation is designed to promote more balanced development and a bigger emphasis on product safety,” Gao said.

There will be a half-to-one-year transition period after the new regulation is unveiled, so that companies can have enough time to deal with the change.

Guo Yongxin, deputy secretary general at China Light Industry Council, said more than 60 percent of e-bicycles are unqualified based on the new regulation, and details may soon be out to elaborate on how to deal with such bikes.

“The policy means a dramatic change to the sector, which will motivate companies to upgrade their research and development push. We hope that local governments can give favorable policies and subsidies to the industry, so as to help enterprises better respond to the trend,” Guo said.

According to Guo, the demand for e-bicycles is rising as the booming e-commerce and food-ordering services require more e-bikes to deliver parcels and food.

Also, China’s largest ride-calling company Didi Chuxing and other players are piloting e-bicycle-sharing services, which are expected to revitalize the sector, giving a big boost to sales.