Can the internet just give Harley-Davidson (HOG) a break on its new electric bike dubbed LiveWire?
The ink on the press release noting that the LiveWire — which first entered testing in 2014 — will cost $29,799 and can be pre-ordered in August isn’t even dry and already bike aficionados are ripping the 115-year-old company. Some early complaints stem from the bike’s cost (more than double an electric bike from the “Tesla of Electric Motorcycles” Zero) to its range on a full charge only being 110 miles in city settings (presumably shorter on highway due to aerodynamics).
Surely there are other critiques floating around out there on Twitter from the Harley-Davidson faithful, which is always a boisterous bunch.
But the bottom line is that LiveWire marks the first step in Harley-Davidson trying to reverse its fortunes after years of waning sales. LiveWire is a bet that Harley-Davidson can make greater inroads with millennials moving to cities, after all a bike is much easier to ride (no clutch, for example).
And in fact, LiveWire is arriving to market years ahead of schedule — an indication that Harley-Davidson is grasping the production of electric bike making much quicker than many expected. Advancements in battery technology since the LiveWire prototype hit the roads in 2014 helps, too.
What’s wrong with all of that?
“This is huge and just the beginning,” Harley-Davidson CEO Matt Levatich tells Yahoo Finance. “With LiveWire we’re setting the standard with a no excuses electric Harley-Davidson. We aim to lead in the electrification of two-wheeled freedom with a broad range of products, and we will. This is one key part of our More Roads to Harley-Davidson strategy to build the next generation of riders.”
Adds Levatich, “We’re pumped.”
LiveWire is just the first step
In July, Harley-Davidson unveiled a host of new bikes set for release by 2022. Two in particular were electric offerings — a stripped down version of the LiveWire and one that resembles an e-scooter.
Harley-Davidson said developing the bikes will require operating investment through 2022 of $450 million to $550 million and capital investment during that stretch of $225 million to $275 million. The range of new bikes are expected to haul in more than $1 billion of annual sales in 2022 compared to 2017.
Investors would welcome that new revenue stream from Harley-Davidson.
Through the first nine months of 2018, Harley-Davidson’s motorcycle sales dropped 5.9% as riders continued to delay new purchases. The ongoing reluctance of millennials to hop on a bike to ride to a Whole Foods also continues to plague Harley-Davidson. Operating profit margins for the first nine months of 2018 fell to 12% from 14.8% a year ago.
Harley-Davidson’s stock is down 30% over the past year, worse than the 7% decline in the S&P 500. Indian motorcycle maker Polaris Industries has seen its stock tank 38% during the same timespan.
So, let Harley-Davidson have this win. After a year of its storied American brand being entangled in Trump tariff politics and sales continuing to be under pressure, Harley-Davidson has earned its day in the sun. Actually, a day in the sun while sitting atop its first electric bike that can go 0 to 60 mph in 3.5 seconds.
Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi
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