Harley Davidson (HOG) will start production on electric motorcycles in 2019. Dubbed “Project Live Wire”, the e-motorcycle is expected to resemble a concept bike the company introduced back in 2014. While HOG’s 2017 revenue declined 60.2% YOY (to $2.4 billion), the one segment of the motorcycle business that has been growing is the female demographic (according to Motorcycle Industry Council); so, it makes sense to invest ($25-50 million/year) in the development of lighter bikes (with smaller engines) and EVs, preferred by women. HOG will have little competition in the U.S electric street bike market, none of their big-name competitors (Honda, Kawasaki, Suzuki, BMW & KTM) offer a comparable product.
Howie Long-Short: The big-name competitors referenced (HMC, KWHIY, SZKMF, BAMXF and VIE: TKMI) don’t offer 2 wheel EVs, but HOG will have competition in the U.S. market from a series of smaller companies. Energica (BIT: EMC), publicly traded on the Borsa Italiana, Alta Motors and Zero Motorcycles, are all playing in the space. Alta Motors is privately held, but Telsa (TLSA) participated in the company’s $27 million Series B round (June ’17). Zero Motorcycles appears to have raised over $85 million, but all of it is private money.
Fan Marino: The Trump administration is causing headaches for HOG shareholders as recommended quotas on imported foreign metals has the EU prepared to retaliate; with tariffs on U.S. products sold in Europe. Should the recommendation pass, the European Commission has said it would take “measures to defend EU industry”; including the implementation of tariffs on U.S. agriculture products, bourbon and HOG bikes. Why HOG? The European Commission is looking to hurt House Speaker Paul Ryan, who hails from Wisconsin; the location of HOG headquarters.
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