Could Harley’s LiveWire Go The Way Of MV Agusta?

[advrider]

Harley-Davidson recently had its quarterly investors meeting, and its results were pretty “meh to ugh.” But one thing did stand out, and that was LiveWire’s (Harley’s electric motorcycle company) financial performance.

Ouch!

If you had to sum it up in just one word, that word would be… dismal. Add another word, and the description would be “utterly dismal.” Yes, at the moment, LiveWire looks to be dying on the vine. In its most recent quarter, LiveWire shipped a measly 33 ONE electric motorcycles, down from 204 in the same quarter last year. That’s an 84 percent decrease in unit sales. Worse still, Harley-Davidson branded remaining LiveWire ONE’s didn’t make a single sale.

Lots of negative numbers

If you look at the dollars involved, LiveWire’s revenue dropped from $13M to $7M, and the company posted a $32M operating loss. LiveWire said the loss is the result of “planned development investments to advance EV systems.”

And how the company made a total of $7M in revenue isn’t a wonderful story. Most of it came from the company’s STACYC electric balance bikes for children. And even that number dropped year over year with revenue of $6.3M, down from $7.4M in the second quarter of 2022.

Image taken from Harley-LiveWire Group Q2 2023 financial results. Image: LiveWire

But there could be a saving grace, which comes in the form of LiveWire’s upcoming S2 Del Mar middleweight electric motorcycle. LiveWire recently released the bike’s complete production specs and its MSRP of about $15,500. That pricing makes it competitive with other current electric motorcycle brands. The machine’s smaller size also makes it more “attainable” for newly minted riders.

Only 1,000 motorcycles

Harley-Davidson/LiveWire’s 2023 outlook calls for the company to sell between 600 and 1,000 motorcycles in 2023. That’s a considerable increase in percentage, but selling 1,000 motorcycles for $15,500 won’t result in a massive pile of profit dollars in 2023. Even if they reach their 1,000 bike outlook with a margin of 15 percent, the electric motorcycle manufacturer will only bring in about $2.3M. That’s in the decimals of Harley-Davidson’s net income. Still, LiveWire also said they are investing in other electric motorcycles using the Del Mar’s S2 architecture. So perhaps there’s another model that will quickly build revenue and profit dollars in the not-too-distant future.

In the investor’s call, LiveWire said that the first S2 Del Mars had just rolled off the assembly line. Perhaps the small number of sales is reflective of their current production capacity. But LiveWire didn’t announce how many motorcycles they will be able to produce once production is running at full speed. Nor did they indicate the number of pre-orders/reservations the brand had received, so it’s difficult to say why LiveWire thinks sales will only be up to 1,000 units.

S2 Del Mar the key?

But none of LiveWire’s aspirations will likely continue without the assistance of its parent, Harley-Davidson. And if the S2 Del Mar doesn’t reach Harley-Davidson/LiveWire’s 2023 outlook, you have to wonder how long Harley will continue propping up the brand with its own money or how long investors will wait to get something for their investment dollars.

When all is said and done, the S2 Del Mar could mark the turning point for Harley’s potential entry point into electric motorcycles.

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