I've had quite a reaction to my comment of last month. It was written just after the news that Harley was to 'float' its LiveWire operation, turning it, in effect, into a joint venture with private equity investors and South Korea's KYMCO - in which it will still own 74%.
Rather than a conventional IPO, private offering or direct listing, Harley's choice has been to use a SPAC (Special Purpose Acquisition Company) to bypass some of the scrutiny and uncertainty that other routes to market generally involve - especially the IPO route.
The news was reported (as we would normally do) based mostly on Harley's own widely propagated news release and, as I usually do, I reserved my primary personal observations (be they good, bad or indifferent) for my Comment piece.
I was almost entirely complimentary - talking mostly about how advanced its plans already were and discussing the S2, S3 and S4 'Arrow' powertrain platforms that now make this iteration of the LiveWire project a viable, forward-facing and, above all, modular proposition. One that rescues the brand from its doomed initial price-point trauma ($30k) and makes it a versatile offer that can speak to multiple potential user groups, demographics and price-points.
All good. The only issue I raised was what appeared to me to be pretty ambitious, indeed unrealistically ambitious forecasts for how many units Harley will be selling and how quickly it would be getting there.
pushed a lot of good buttons
Harley's forecast is to be selling some 100,000 LiveWire units (worth around $1.7bn) by 2026 and some 190,000 units by 2030. My strong belief being that (as with cars), until there is compulsion in primary markets, namely until markets like the United States and Europe have regulated new internal combustion engine models out of showrooms, such forecasts are the stuff of dreams.
The reactions I have had have fallen largely into different camps. First, and most silly, are those who have misinterpreted my remarks as a call for soonest possible regulation for an end to ICE production. As the proud owner of a gas guzzling 20-year-old V8 Jaguar, I am far from being a conventional tree hugger.
A second group of reactions, and another that is equally as wide of the mark, assumes that I just don't understand shares, trading, Wall Street, investment vehicles and all that good stuff. For the record, and in the interests of full disclosure, I am in fact a Harley stockholder. I also have shares in Polaris (Indian Motorcycle), PIERER Mobility of Austria (the KTM, Husqvarna and GasGas parent company) and in the Volkswagen Audi Group (VAG) - for the only reason that that is the corporate entity that is the ultimate (and therefore tradable) beneficial owner of Ducati.
I quite openly admit to not being an expert investor. Quite the opposite in fact. Everybody needs to recognize their limitations, and I became sanguine about my limited abilities as a stock picker a long time ago.
The other reactions that I received are split between those who simply assume I just don't like America (get a life!) and, interestingly, those who say "Hurrah! Thank goodness there is still someone who'll speak up when the emperor is wearing no clothes."
Among that latter group, the reactions from European readers have been the most instructive. Europe is at least a decade closer to accepting the need to eliminate tailpipe carbon emissions than the U.S. is, and their response has been "Harley is insane!"
Unless it is banking on some 60,000 a year or more of those 100,000 units being LiveWire badged low cost, "low displacement" urban sales in Asia - in which case the dollar sales value forecast is way off beam. I hope I'm wrong. My shareholding will doubtless prosper if I am.
But realistically? Nah. I stick to my opinion that until or unless there is compulsion, demand is going to remain as slow to build as the numbers of available product offerings and the places to charge them are also proving to be.
Harley has pushed a lot of good buttons this past couple of years and, I dare say, that by the time the print edition of this month's AMD is hitting desks and dealer doormats, they will have pushed some more too. Its "Further.Faster." MY2022 Part Deux new model launch is due ten days after this edition goes to press.
The faster part of that branding likely refers to a second Sportster S model, or to the 117" engined 'ST' badged Touring and Softail variants that were absent from Harley's "Part the First" MY2022 announcement, or both; or maybe something along the lines of the Bronx will after all see the light of day? But maybe the "Further" hints at an additional new LiveWire model to sit alongside the $20k LiveWire One.
A model that convincingly addresses the range issue - so will go "Further" between charges. Who knows - I clearly don't, but either way, Harley/LiveWire will need to 'Get on The Gas' (!) with additional electric model announcements if they are going to stand any chance of even being able to wave lovingly in the distance at its six-figure unit numbers forecast five years from now.
This whole business of LiveWire, the SPAC and the forecasts were going to be among the (many) subjects I was looking forward to being able to talk with people about on my end of January first trip back into the United States in 24 months.
I had two weeks planned. I was going to fly out from the UK to Las Vegas for AIMExpo, then spend a week on the West Coast visiting vendors, then take in the Drag Specialties Louisville NVP on the way back.
However, as reported, LeMans took the very difficult decision to cancel its show, and at short notice too. Having already taken the personal decision that the first two legs of the trip were overly ambitious at this time, there was much additional disappointment surrounding its decision to can Louisville - but, to be fair, it was the right decision.
Drag Specialties, Parts Unlimited and their parent company are to be complimented for having the chops to put the real interests of their employees and guests above all else. Kudos!
