Harley-Davidson has just unveiled its new 5-year plan known as The Hardwire. And while some old-school motorcycle media had previously speculated that Harley-Davidson would drop electric motorcycles, they couldn’t have been more wrong.
For anyone who has actually ridden the LiveWire electric motorcycle and talked with the Harley-Davidson execs that were responsible for bringing that project to fruition, it was obvious that H-D was going full speed ahead on EVs.
That didn’t stop analysts on the sidelines from fearing the worst though, as H-D spent the last few months focusing on implementing an internal cost-cutting plan known as The Rewire. According to H-D CEO Jochen Zeitz, The Rewire plan will save the company $115 million annually.
With The Rewire plan now finished, H-D has unveiled the company’s updated 5-year strategic plan, The Hardwire.
The plan focuses on several key aspects designed to boost revenue and invest in the company’s future, including investing between $190 million to $250 million per year in both gas-powered and electric motorcycles.
H-D intends to invest more in its core heavyweight motorcycles while also creating a new division in the company specifically for the continued development of electric motorcycles.
In 2018 and 2019, Harley-Davidson had a plan for at least five types electric two-wheelers ranging from full-size electric road bikes and flat track electric motorcycles to e-mopeds and e-trail bikes. The goal at the time had been to roll out five different EVs by 2022, though the COVID-19 pandemic severely disrupted H-D’s plans.
The company also recently spun off the H-D electric bicycle division as a new startup Serial 1, which works alongside its majority stakeholder H-D.
As Zeitz explained:
“The creation of a separate division will allow full autonomy to EV development, freeing the business unit to behave with the same agility and speed as a tech startup while still leveraging the support, expertise and oversight of the broader organization, allowing for cross pollination with innovation in electric with combustion product development.”
The Hardwire strategic 5-year plan also includes equity grants for all of H-D’s 4,500+ employees, including hourly factory workers. Details regarding the equity grant have yet to be provided.
Can Harley-Davidson’s new plan right the ship?
Despite what many keyboard warriors would have you believe, Harley-Davidson isn’t living with its head in the sand. The company sees the writing on the wall, even if it isn’t pretty.
H-D’s financial struggles have continued to plague the company, including recently announcing a 32% decrease in revenue year over year for Q4 2020.
Nearly a year ago, H-D brought in Jochen Zeitz as acting president & CEO before making the appointment official a few months later.
The German-born branding guru is the first non-American CEO in the company’s more than 100-year history. His past successes including saving the beleaguered Puma sportswear brand in the 1990’s. Jochen has been a proponent of environmentally and socially sustainable business practices, and has been a supporter of Harley-Davidson’s development of electric vehicles.
By focusing on H-D’s core strength of heavyweight motorcycles and by investing in the development of electric motorcycles, the company may well be setting the stage for more solid footing both in the near and more distant future.
I’m an EV guy, so of course the news that H-D will focus on its core heavyweight bikes does noting for me. But I’m also a realist, and I know the company sells a lot more gas bikes than electric bikes right now. And so if H-D needs to double down on loud, shiny big boy toys while also investing in EVs, that’s alright with me. And the reason I can accept it is because I see it as the best way to ensure H-D can survive to finish what they started with the LiveWire.
Believe it or not, Harley-Davidson remains one of the most progressive legacy motorcycle manufacturers in the world when it comes to electric vehicles. Most electric motorcycles in the market today come from EV-specific startups like Zero (though I’m not sure if you can call Zero a startup anymore?), making H-D one of the few legacy manufacturers to enter the game.
And in the US, they even appear to be achieving early success.
H-D claims that its LiveWire is the best-selling electric motorcycle in the US, and the numbers appear to support it.
The profitability of electric motorcycles is still a tricky dance, which explains why so many legacy manufactures have dragged their feet. But if H-D can right the ship and continue building upon its head start in the EV space, the company could actually become a leader in the electric motorcycle industry.
As long as the money doesn’t run out.
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