Why is Harley-Davidson spinning off its electric bike business, LiveWire

Harley-Davidson is Spinning Off Its ‘Tesla of Motorbikes’

There are fewer brands in the U.S. more recognizable than Harley Davidson, and now its spin-off electric bike firm is going public via SPAC

Not for the first time, ‘Electric Vehicle’, or EV stocks, have been the buzzwords of the year thanks to Tesla, Rivian, et al. 

But there could be another market leader — in its own right — emerging soon in the form of Harley-Davidson’s (NYSE: HOG) electric-motorcycle division, LiveWire. 

Electric motorcycles? Why didn’t I think of that..?

Have you seen actors Ewan McGregor and Charley Boorman’s documented motorbike adventures ‘Long Way Up’? The 11-part series saw the pair travel 13,000 miles around Central and South America on experimental electric Harley Davidson motorcycles. The results were mixed, but the pair highlighted that EV motorbikes are a very real contemporary possibility. 

And now, Harley-Davidson is spinning off the fruits of its labor to the value of approximately $1.77 billion, in a SPAC deal with AEA-Bridges Impact Corp — and it’s keeping a 74% stake in the business. With no other EV makers operating in this space right now, it’s a chance for Harley-Davidson to be part of a resurgence in motorbike interest, which has waned in recent years as drivers become more sustainable. And the outlook is optimistic, with LiveWire unit sales volume of 100,961 electric bikes expected by 2026.

Compared to the $100 billion valuation that recently public Rivian has attained, LiveWire might seem very cheap. However, it’s important to note that the motorbike market in the U.S. is worth little more than $7 billion, compared to the $80 billion car industry. 

That being said, this is an exciting niche play for investors as Harley-Davidson looks to capitalize on recent — and arguably fanatic — interest in EVs. LiveWire is expected to list on the New York Stock Exchange under the symbol ‘LVW’ in the first half of 2022.

Read More