Of course Harley-Davidson’s first electric motorcycle, the LiveWire, isn’t selling. It was never meant to generate big sales volumes, but it is part of Harley-Davidson’s greater strategy. In this article I’ll be covering why the LiveWire isn’t selling well (and it should come as no surprise), along with three predictions for the LiveWire’s future.
For most of 2019, media publications, especially motorcycle ones, touted Harley-Davidson counting on electric motorcycles to attract a new generation of younger, affluent, green-friendly riders, to help them reverse their declining sales. Whenever I saw motorcycle publications saying this I found it fascinating. Are they really that out of touch with real motorcyclists, or am I the only one who doesn’t know a lot of people looking to spend $29,799 on a green-friendly first motorcycle? Could it just be that the motorcycle publications are trying to kiss up to the industry’s biggest advertiser? Say it ain’t so. (PS: It’s always, painfully, so).
The LiveWire, priced at $29,799 before dealer fees, provincial/state licensing fees, and taxes is just a few thousand dollars short of Tesla’s Model 3. Harley-Davidson is marketing it as the “IT” bike for affluent new green-friendly motorcyclists, but here’s the thing, how many affluent, green-friendly, young, new motorcyclists do you know?
The more things change the more they stay the same at Harley-Davidson
Reports indicate that the bulk of sales are not coming from young new riders. Can you guess who they’re coming from instead? That’s right. Existing old riders. Surprise, surprise. Harley-Davidson is still being carried by well-off old white men. Nothing new here.
The more the sun sets on the Boomers’ riding career, the more Harley stock prices set downwards with them. We already know motorcycle dealers are closing down, but in 2018, Harley had it’s sharpest decline in sales in the last half decade. Sales in 2019 are expected to decline once again. It seems like every time Harley gives updates on the LiveWire, financial and motorcycle publications alike act very surprised that everything isn’t all hunky-dory.
Carrying the LiveWire isn’t cheap for dealers either
Dealers have mixed feelings towards the LiveWire themselves. Carrying the bike means having to make an investment in a Level 3 charging station at the dealership. This is a requirement of Harley-Davidson’s corporate office. If a dealer doesn’t think demand for the LiveWire is enough to yield a positive ROI, they won’t invest either the time, or the space required.
The Motor Company also isn’t looking to add any financial discounts. Instead, dealers believe they’re keeping the numbers of LiveWires tight, in part to help reduce the chance of markdowns on the vehicle.
Prediction 1: Harley-Davidson follows Tesla’s example
Industry analysts at Wedbush Securities estimate that the LiveWire will represent less than 1% of Harley-Davidson’s vehicle sales. So what’s the real plan for the LiveWire moving forward? Harley could be taking a page from Tesla’s playbook:
Tesla began with a $100,000+ car, and over the years have developed down to a $35,000 car. We already know that Harley is planning on expanding in the electric motorcycle and electric bicycle market with four new models between now and 2022. The LiveWire is likely a flagship model launch, with more affordable (and realistic) options still to come.
Prediction 2: Harley-Davidson finds creative ways to incentivize LiveWire purchases without discounting the LiveWire
Discounting a product cheapens it’s perceived value in customer’s eyes, and that’s not something Harley wants to do with their first electric baby. Instead, look for Harley-Davidson to find new creative ways to offer incentives to would-be LiveWire buyers.
UPDATE/EDIT: So I looked into this more, and it turns out, they’re already doing this. Harley is offering 500 kwh of free charging, or about two years of free electricity for people who purchase the LiveWire. Expect more like this to continue.
Prediction 3: The LiveWire does sell more Harley-Davidsons to young people, just not more LiveWires to young people
“But will young people buy it?” seems to be the question motorcyclists keep asking about the LiveWire. The truth is, it doesn’t matter if young people will buy it or not because the LiveWire isn’t about driving LiveWire sales. The LiveWire is about driving the overall brand and overall vehicle sales.
When you switch from a “Will young people buy it?” mindset, to a “Will it help get more young people be interested in Harley-Davidson motorcycles?” mindset, the LiveWire makes a lot of sense. It draws the ire of from green-friendly folk, industry media and other digital publications, and it’s even been featured in Hollywood blockbusters.
I like the LiveWire, a lot actually. I was fortunate enough to have worked on one in a marketing capacity when I was working for Harley-Davidson in Canada. But the next time you see a moto journalist telling you how surprised they are that the LiveWire isn’t selling, slap them. The market for this bike is tiny. Harley knows that. The LiveWire wasn’t designed to be a sales volume leader, it was designed to showcase and to create interest. In that regard it has always been and continues to be successful.
In my opinion it’s Harley’s first step into the electric market, and they wanted to do it with a bang to show that they’re taking electric motorcycling seriously from the very beginning. It’s a good strategy. The LiveWire will help to get more young people buying more Harley-Davidsons because it will help shape the perception of the brand. Those young people just won’t be buying LiveWires, and that’s ok.
Update: Here’s something I didn’t predict, but should have! Honda is looking at new ways of improving regenerative braking for electric motorcycles.