With everyone poo poo’ing the LiveWire for it’s range and price tag I thought I’d offer a counterpoint. I don’t think the LiveWire was designed and marketed as a product for the majority of existing brand loyal or the Millenial market that Harley needs to switch to to keep long term revenue flowing. Given how popular the Tesla Model 3 is now I think a lot of people hold the notion that electric motorcycles with broad appeal and affordability are just around the corner however I believe that Model 3 of motorcycles is still two design lifecycles away and the LiveWire is Harley’s first step in that direction.
Consider Tesla’s path to success. The company was founded in 2003, they released the first model Roadster in 2006 costing 109,000 dollars(135,000 in today’s money). It was a two door sports car with no better performance than a Model S today at more than double the price and virtually none of the luxury features or fancy tech the Model 3 has, not to mention a tiny fraction of the public charging infrastructure available today. It was a truly terrible value proposition. So why make it and who would be stupid enough to buy it? The consumers were irrational early adopters, nerds from Silicon Valley who had plenty of disposable cash, a commuting lifestyle that the first gen model could satisfy, a strong belief in solving environmental issues that the philosophy of the car aligned with and a passion that allowed them to overlook the inconveniences and shortcomings of a first generation product. Tesla won big with this early business model. They only had to produce a small number of cars with high revenue per car made, they got influential consumers who repped their brand hard, enthusiastic feedback that helped them develop their next generation of product and concentrated their consumers in high income areas that acted as hotspots to start building out their fast charging network.
After the Roadster Tesla made the Model S, then the Model X and then the Model 3, progressively coming down in price and their demographics gradually expanded to include less early adopters and more prudent consumers expecting value for money. If Telsa had attempted to build the Model 3 from the start, they would have had to expand production to absurd levels with no proven product, no real world development and no brand recognition. No one would know who they were, whether the product was any good or not(and it would have been hot garbage) and no infrastructure. In short guaranteed commercial failure. The first step along this path, the Roadster, did not need to be a profitable product to ensure Telsa’s eventual success, nor did it need to have mass market appeal.
Let’s not forget the most exciting news to come in the electric motorcycle game right now is the Lightning Strike a very price competitive bike with a 150 mile range and top speed of 150 miles an hour. Lightning is a company founded in 2006 that got its start making the LS-218, a hugely expensive bike that set the record for the worlds fastest production motorcycle, gas or electric. Zero also has some exciting news in the pipeline, a company that was also founded in 2006, produce it’s first bike in 2009, with a 10,000 dollar price tag, a top speed around 75 mph and a very optimistic 60 mile range off a 4 kilowatt hour battery. Noticing a pattern?
It’s very popular to take pot shots at Harley right now, but let’s assume they’ve still got a few warm bodies over at headquarters. Given that they’ve already committed to making a range of electric motorcycles and mopeds, if they thought they could make an affordable electric motorcycle that would be a huge commercial success right now they would have made it. In reality, nobody has made such a bike and I’m sure they’d love to be the first. The closest so far are the bikes Zero are making and they’re still a pretty tough sell price wise and are being made in very small volumes compared to the larger manufacturers. Given that Harley are the only major manufacturer to put out an electric motorcycle, besides some small scooters, they are the furthest along just by putting the LiveWire on sale next year and have plenty of time to follow the path to success that Tesla laid out.
By releasing the LiveWire at the price point that they are, they will be able to make a small volume of them, get them into the hands of enthusiastic early adopters who will deal with the inconveniences it poses, work out the kinks, and build the reputation of the brand in the EV space, all while keeping costs and risk low. Those early adopters will likely consist of young professionals in Silicon Valley with values and social circles that overlap with the young Millenials Harley hopes to target as their future customer base. Two to three years from now we’ll see a new electric motorcycle from Harley that might hit the 20,000 dollar mark and then after that we might see an electric motorcycle that is truly a compelling value proposition for the average buyer. It’s important to reiterate that no other major manufacturer has gotten as far as far along this path as Harley Davidson has yet and it seems foolish to bash them for not making an all or nothing mass produced EV that could ruin the company when no one else is making the same bet.
I could be totally wrong and they really do all have their heads up their asses but it seems naive to think that Harley Davidson aren’t aware of what the purchasing power of Millenials is these days rather than the product we were shown doesn’t have the goals in mind that we think it does. By all available evidence it seems to be the case that they are following the success model set by all of their EV competitors before them and the rest haven’t even started. So I’ll reserve judgement for now and see what happens.
