Harley-Davidson Really Misjudged the Electric Motorcycle Market
Rich Duprey, The Motley Fool,Motley Fool Wed, Feb 6 6:00 PM EST
Harley-Davidson (NYSE: HOG) had the opportunity to upend the motorcycle industrywith its new electric LiveWire bike. Because of its size, production capabilities, and vast dealer network, Harley could have had a transformative impact on how high-performance electric motorcycles were perceived by the public by bringing an electric motorcycle to market that offered technical relevance and affordability.
Instead, Harley chose to maintain its premium image and offered up a motorcycle of the sort that has doomed the bike maker to four consecutive years of falling sales. The LiveWire may be a technological marvel, but its $30,000 price tag may doom it to be a bike few can afford or will want to purchase. Now, a new bike by the competition may grab even more of the electric market out from under it.
Image source: Harley-Davidson.
A bolt out of the blue
Lightning Motorcycle -- home to the world's fastest production motorcycle, the electric LS-218 -- knows a thing or two about high-performance bikes, and it is teasing yet another electric model that surpasses the LiveWire on virtually every metric.
Though details are still light, the new Lightning Strike promises a 150-mile range, 150 mph top speed, and a 35-minute charge to 80% at a DC fast-charge station -- and will do it all for under $13,000. So far, we only have an image of the Strike's headlights, but we won't have long to wait for more, as Lightning says it will debut in March.
Image source: Lightning Motorcycle.
In comparison, the LiveWire offers only 110 miles of city driving, has a top speed of 110 mph, and takes about 40 minutes to recharge. Saving five minutes on your charge time isn't a big deal, but a finely tuned engine that gives you the raw power you need when you need it is going to turn heads. And that's not to mention the LiveWire's hefty price tag, which means you could buy two Lightnings with superior performance and still have change left over.
The Lightning Strike has the potential to steal all of LiveWire's thunder.
Size matters, though
There are, of course, caveats to this promotional reveal. We haven't seen the Strike's full list of specs, so actual performance can't be competently judged, and Lightning is a small electric motorcycle maker without the distribution, dealer network, or marketing heft of Harley-Davidson. Advertising muscle alone could propel more LiveWire sales than Lightning could hope to achieve.
And in a way, Harley is following the same path as Lightning. The LS-218 is the bike maker's prestige motorcycle and carries a price tag of around $39,000. Having validated its technology and craftsmanship, the company is now coming out with the Strike, which will bask in the rays of its predecessor's halo.
The difference is that Lightning is a boutique motorcycle and is introducing a new model that builds on the legacy of its premiere bike. While Harley could come out with a new model at a lower price point in the future, that's not how it usually operates. Despite motorcycle sales being in a tailspin, it maintains its premium pricing strategy.
Moreover, the LiveWire will be used to sell a completely different kind of electric bike: Harley has revealed a new scooter and an off-road bike that will be developed over the next few years.
E-bikes need a power surge
Having declared that the future is electric, Harley should have introduced a motorcycle that was more affordable. According to data from Polk, analysts at BMO Capital Markets say industry leader Zero Motorcycle only sold 750 electric motorcycles in the U.S. in 2018. If Zero's SR model, which also offers better performance than the LiveWire at half the price, is struggling, than a high-priced Harley-Davidson, even allowing for the nameplate to attract buyers, is going to be a hard sell.
Lightning, on the other hand, is moving with the market, where buyers are looking for more for less. Even with gas-powered motorcycles, buyers are looking at manufacturers with price points much lower than the premiums Harley charges. These high-performance e-bikes with realistic price tags will be the best hope to recharge the electric bike market.
Short-circuiting its chances
This is where Harley-Davidson needed to be. The LiveWire has the right specs and the right nameplate, which means it could have owned the high-performance electric motorcycle market, but its price tag cedes the playing field to Lightning and Zero,and may even boost their sales further.
Prospective buyers will suffer sticker shock from looking at the LiveWire and will look to see what else is available. What they'll find are competing electric motorcycles that offer better performance at half the price or less, and that is a miscalculation Harley-Davidson shouldn't have made.
Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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Wow, another negative view on the Livewire...who would have guessed.
Let's see...battery electric cars as a comparison; Chevy Bolt is $30k+ for a vehicle that had an ICE powertrain would be $20. The Ford Focus was $35 for a vehicle that was $20k with a conventional powertrain. The Tesla is $35k+ at the cheapest. But somehow HD was supposed to come out with a bike for the same price as the gasoline comparison (FXDR?). The ranting and raving from those that would never buy one anyway is getting old.
Edit: what should we change the name of this forum to in anticipation of the Harley-Davidson going out of business in 2020 CY? Maybe the IndianCompetitionForum? That should just about cover all the bases from every corner of the globe, eh?
Not targeted at you brudford....just commenting that the news, magazines, people on YouTube, and those here in this forum seem like they are just licking their chops in excitement at the impending demise of the brand...
Wow, another negative view on the Livewire...who would have guessed.
Considering the article came from the Motley Fool, you could almost make bets on it. The Fool has a position in Polaris, or at least the did at one time.
.Not that they don't have a point- many other articles on the Live Wire point out how much it costs.
I've had several discussions on e-bikes in general and the LiveWire in particular recently and the one single thing everyone seems to miss, and IGNORE when it's pointed out to them, is that this thing is not targeted at the usual customer. It is not expected to take over the primary focus of the MoCo. This is an initial product! Anything more than ten years old with Harley-Davidson on it is "a collectable." As the first e-bike from a major manufacturer, this is a novelty. An instant collectable! There are more than a few H-D's sharing garage space with some of the most expensive cars at affluent people's homes. LiveWires WILL be doing the same even if they don't get 100 miles a year. That's a limited market, but it is a limited production bike! You may not see many in showrooms, but they will sell. Those dealers who do order one for stock, will complain about them not selling, because the market will be so narrow. The technology is advancing and advancing disproportionately to the demand. Those who get in first with R&D have a distinct advantage if they can (financially) justify the project. Is this the future of Harley-Davidson? Probably not in my lifetime, but I doubt it'll be the last electric model produced either.
Regarding e-vehicles in general, I feel we're on the cusp of a turning page. The two major factors in e-vehicles is range and recharge. Pay attention and you'll notice charging stations popping up discreetly all over the place. Even WalMart has begun installing them! These signs are becoming more common everywhere.
Battery tech is advancing as well. When being able to recharge is as convenient as topping up a gasoline tank, there will be no more reason not to go electric for the average buyer, provided prices become compatible. Two factors figure into that. #1, the price of e-vehicles is coming down as tech and sales makes production less costly. #2, traditional vehicles are still increasing in cost! It may take ten years, but sooner than later, there will be equilibrium in the buyer's A or B decision. These are only the market factors. We don't have any idea at present what government intervention may enter into the picture, whether it be subsidies for manufactures, buyers/users, or even restrictions on traditional vehicles. Who knows? Judging from increasing attitudes toward "green whatever" though, I think some government involvement in making this reality can be expected. There may be better choices in ecco friendly personal transportation (H-y-d-r-o-g-e-n!), but the mold has already been cast I'm afraid. Electric is where we're going. The support infrastructure is already well on the way to being built. When the e-vehicle revolution hits, it's gonna hit FAST! Anyone notice that GM just shut down half a dozen plants to restructure and concentrate on e-vehicle production? This is not a conspiracy theory, this is the future. H-D's decision to jump in early, even if the project operates at a deficit for years, I personally see as a step in the right direction. The naysayers great great grandpa's probably thought the boy's were nuts for building that motorized bicycle out behind the house in 1903 when there were so many, much more dependable horses around.
By the way, the article in the OP is laughable in its comparison fo the in production and for sale LiveWire to a supposed competitor that we know NOTHING about except hype and headlight shape. Haters are gonna hate!
Last edited by username already exists; 02-08-2019 at 10:25 PM.
An instant collectable! There are more than a few H-D's sharing garage space with some of the most expensive cars at affluent people's homes.
............. yeah, the best thing to build new rider interest is an initial run of motorcycles stored behind expensive cars in the garages of some affluent people's homes.
..... What ever you do, don't phkng ride'm. It's 'An instant collectable' !
The money spent developing the livewire could have been better spent on additional engineering and testing on the M8 and on increasing the overall quality and reliability of the current product offering. That engine is a big step in the direction of lowering the overall cost of ownership because it has decent performance without expensive upgrades. But all the problems over the last couple years have probably lost a lot of sales at a time the company really doesn't need any self inflicted damage to the brand.
............. yeah, the best thing to build new rider interest is an initial run of motorcycles stored behind expensive cars in the garages of some affluent people's homes.
..... What ever you do, don't phkng ride'm. It's 'An instant collectable' !
My dealer here in PA informed me he is not going to have one on his showroom floor . He thinks the E- Bike will sell better in urban areas like New York, LA ? I would consider one but not at 30,000$ or even 13,000$ . I would buy one at a 4-5,000$ price point .
I've had several discussions on e-bikes in general and the LiveWire in particular recently and the one single thing everyone seems to miss, and IGNORE when it's pointed out to them...
The point is that it IS in production. The R&D effort and staff is EXISTING!
Does anyone truly think - for even 1-second - that anyone in the corner offices on Juneau St. expected everyone to rush to the dealerships and trade in their slim fat bob boy glide on a single seat 100-mile QUIET replacement? Everything you are used to. All those names I'm poking fun at. IT's ALL MARKETING!!!!!! Forget that BS about "Harley lifestyle." It is a carefully crafted market strategy that has served the MoCo VERY well for forty years. I'm not saying it's all BS. I'm not accusing anyone of being fooled or being fake. None of that! The trend originated despite the company's opposition to being part of it, (remember they refused to provide bikes for Easy Rider fearing a negative image), but they were smart enough to recognize a good thing when that stuff did become widely accepted and they embraced it. It has worked out quite well. While everyone is talking about H-D bike sales falling through the floor, they conveniently ignore that the company is STILL registering BRAND PROFIT!!!! "Accessories" has been the #1 product of the MoCo for years. THAT is why the clothing and home decor boutique takes up more space than the showroom!
The inescapable FACT that the demographic which makes up the vast majority of that market is quickly fading is not lost on the company. Not many 80 year-old women can rock a spaghetti strap tank top! While everyone is bemoaning H-D's lack of attracting young riders to the established market, the MoCo is looking to the future market. Electric is coming fellas. With all the shortcomings, all the issues, all the everything, it's coming and when it hits, it's gonna take over in a heartbeat. Consider all the electronic controls on a new bike. All that stuff must be engineered to operate mechanical systems! And it has to be stuffed into a package maintaining a 20th century aesthetic. With an e-bike, all that stuff is just part of the system! No exhaust or intake to monitor. No vibration to concur, that's part of the motor design! Design engineering, while radically different from EVERYTHING we know, becomes much simpler. Most importantly though is that e-vehicles ARE going to be the norm - soon. Even if this particular model only lasts one year, the R&D is there. It only has to be updated as the tech moves forward. If there are still motorcycle museums in 2100, you can bet those that have one will be showcasing their 2019 LiveWire display!
Last edited by username already exists; 02-09-2019 at 12:48 PM.
02-08-2019, 08:01 AM
Harley E-Bike
Rich Duprey, The Motley Fool,Motley Fool Wed, Feb 6 6:00 PM EST 
Image source: Harley-Davidson.
Image source: Lightning Motorcycle.
Judging from increasing attitudes toward "green whatever" though, I think some government involvement in making this reality can be expected. There may be better choices in ecco friendly personal transportation (H-y-d-r-o-g-e-n!), but the mold has already been cast I'm afraid. Electric is where we're going. The support infrastructure is already well on the way to being built. When the e-vehicle revolution hits, it's gonna hit FAST! Anyone notice that GM just shut down half a dozen plants to restructure and concentrate on e-vehicle production? 
This is not a conspiracy theory, this is the future. H-D's decision to jump in early, even if the project operates at a deficit for years, I personally see as a step in the right direction. The naysayers great great grandpa's probably thought the boy's were nuts for building that motorized bicycle out behind the house in 1903 when there were so many, much more dependable horses around. 
Haters are gonna hate!
