In 2014, Harley-Davidson took its LiveWire prototype electric motorcycle on a road trip to gauge consumer interest. During a recent earnings call, the company announced plans to bring an electric motorcycle to market. The marketing plan will be based on research from the 12,000 people who rode the LiveWire.
“You’ve heard us talk about Project LiveWire,” said CEO Matt Levatich. “It’s an active project we’re preparing to bring to market within 18 months. The EV motorcycle market is in its infancy today, but we believe premium Harley-Davidson electric motorcycles will help drive excitement and participation in the sport globally.”
CFO John Olin said Harley aims to be the world leader in the electric motorcycle market, and will invest $25 million to $50 million per year in electrification technology over the next several years.
However, the company’s recent earnings report also brought bad news: Harley sales fell 11 percent in the fourth quarter and 8.5 percent for the year. The company plans job cuts and a plant closure.
US demand for motorcycles in general is falling – industry retail sales were down 6.5 percent in the fourth quarter of 2017. Electric motorcycles represent a small but growing segment. In a 2016 report, market research firm TechNavio projected 45% growth in the e-cycle market by 2020.
“I don’t think there is a way forward for Harley,” says Bloomberg Intelligence Analyst Kevin Tynan. “Investment in [electric] tech will be funded by a dying business, and they are basically starting from scratch. Either they shrink to demand and be what they’ve always been or they sell out and pursue some weird future-mobility business model that doesn’t promise anything.”
Alan Stulberg, the founder of Revival Motorcycles, is more optimistic. “My feeling is that [the electric bike] will be well-received by the public and new buyers, which Harley direly needs, but not by people who normally ride a Harley. It’s awesome. It’s necessary. The more people who enter that market, the better.”
“The universal appeal of [LiveWire]…gave us a lot of confidence that electric motorcycles have broad-based appeal,” said Levatich. “They are going to sit alongside existing Harleys in garages as much as they’re going to create new interest in the sport.”