Harley Davidson announced it would spin off LiveWire, its electric motorcycle division, in a new SPAC deal last week, creating the first “publicly traded electric motorcycle company in the United States.”
The $1.77 billion merger with a blank check firm increased LiveWire shares by 1.5%. Harley Davidson will continue to hold the majority of company ownership of LiveWire at a 74% company stake.
The merging acquisition was initially expected to close in the first half of the year. Shareholders approved the merge last week amid concerns from investors of interest surges and market volatility.
Harley Davidson initially launched their first e-bike, aptly named the LiveWire, back in 2019. Now the bike is released as a sub-brand to remain more competitive in the market amid a decline in recreational motorcycle owners,
LiveWire currently has an electric bike with a starting price of $16,999 and another starting at the heftier $22,799. While the bikes do not require gas, high price points during record inflation do not make them an ideal purchase for many at this time according to some industry observers.
“People aren’t going to be buying these units in 2023 if they’re facing 8-9% inflation. They are going to want [to use their money] to buy groceries,” senior equity analyst Jaime Katz of Morningstar commented.
“I think there was probably a more optimal time to do this, Katz commented. “Maybe there was something facilitating the actual execution that was sort of like ‘now or never,'” he pondered.
Chief executive officer of Harley Davidson, Jochen Zeitz, told CNBC in an interview that Harley has “secured supply for its electric bikes for the next few years. The future will be electrified also in motorcycling … [it’s] a given.”
Since Zeitz took over as CEO, Harley Davidson’s shares went up over 20% in his first year. The launch of LiveWire and electronic bikes is a cornerstone of Zeitz’s plan to remain fresh and relevant, and most of all, profitable.
“We want to lead in electric [bikes],” Zeitz said.
“All the values that made Harley great in terms of adventure, in terms of freedom — freedom for the soul, as we say — are also values that very much translate into LiveWire,” he continued.