With a price tag of almost $30,000, some people think that Harley-Davidson’s LiveWire electric motorcycle will be dead on arrival.  After all, there are other competitors like Zero and Lightning vying for electric motorcycle market share.  Their offerings have similar specifications with sometimes superior claimed performance.  And these machines come in with a cost that is between 20 to more than 50 percent less than Harley’s LiveWire.

Price driver

So what’s driving the price of  Harley’s LiveWire?  Presumably, as a large motorcycle manufacturer that is several times larger than either Zero or Lightning, there should be economies of scale that Harley would be able to leverage to help reduce cost.  Comparatively speaking, Zero and Lightning have far less capital and budget to build their machines.  So how is it then that both Zero and Lightning have brought in their machines at a much lower price than Harley Davidson?

Harley-Davidson concept scooter

Harley-Davidson’s concept scooter. The Livewire is supposed to draw people into Harley’s line of electric motorcycle offerings.

According to Harley-Davidson’s Vice President of merchandise planning and portfolio, Marc McAllister, the price of the LiveWire is driven by limited production quantities.

“We don’t expect mass-market adoption.”

What?  Harley spends piles of money and expends precious limited resources to build its first electric motorcycle and it has already determined that it won’t sell in quantity?  So why invest in electric motorcycles at all?

A portfolio of electric motorcycles

Well, Harley-Davidson’s take on the LiveWire is different than most might expect.

“The LiveWire is the beginning of a portfolio of motorcycles and scooters.”

What McAllister means is that the LiveWire is the first of a number of Harley-Davidson branded electric vehicles.  His point is that many people will consider buying an inexpensive electric Harley-Davidson because it shares some of the excitement of the $30,000 LiveWire.

Price not the issue

In Harley-Davidson’s opinion, the big issue for the LiveWire is not its initial price.  The issue is whether it will be intriguing enough to lure people to the remaining portfolio of Harley-Davidson electric vehicles.  In other words, Harley-Davidson sees the LiveWire as a “concept bike” that will draw attention to their line of electric vehicles planned for the future.

Harley-Davidson's concept dirt bike eBike.

Harley-Davidson’s concept dirt bike like electric motorcycle.

Setting Harley apart from the competition

When asked what the LiveWire (or other future Harley electric vehicles) will offer that the less expensive and potentially better-performing competition does not, McAllister said:

“First of all, we’re bringing a real Harley-Davidson encounter to an electric bike that manages and develops power in a great way.  We also bring 115 years of experience of the way to service customers, and we bring support and capability at ensuring riders have a great experience. ”

McAllister went on to say that the LiveWire will be accessible at a network of over 200 Harley dealers as well as additional dealers they hope to grow in the future.  This is a fair point because neither Zero or Lightning sells large quantities of bikes and have very little dealer presence.  So in the case of support, chalk one up for Harley.

Harley-Davidson is also looking at electric vehicles from an angle that other electric and gas-powered motorcycle manufacturers haven’t fully addressed.  Things like “barriers” to entering the motorcycle market.

Barriers to riding

Harley-Davidson thinks that obtaining a motorcycle license is time-consuming and costly.  Harley-Davidson’s solution to this is to sell electric motorcycle products that can be legally ridden on the road without a license.  In Harley’s mind, their portfolio of smaller less costly bikes is a gateway to more expensive Harley electric motorcycles.

Some may find motorcycles intimidating and potentially dangerous.  Harley thinks that using safety technology will help alleviate some of those fears.  Harley believes cornering anti-lock brake systems and adjustable riding modes will make riding less scary to novices.

A different approach

Clearly, Harley-Davidson is approaching electric motorcycles on a different tact than most other electric motorcycle manufacturers.  To me, their strategy seems a little backward.  If they had lots of experience and sales of electric motorcycles in their pocket, I can see the LiveWire being touted as a “concept” machine.  The concept could then draw those previously not interested or on the fence about buying into electric motorcycles.

But the reality of the situation is that Harley-Davidson does not have lots of electric motorcycle experience.  In fact, they haven’t even released their production machine yet.  There are still lots of unknown’s about Harley’s LiveWire.  When the production model hits the streets, it may have been bettered by the competition for far less money.  Unless the Livewire significantly outperforms the competition, Harley-Davidson’s concept of drawing in other buyers will be lost.

Can they succeed?

I wish Harley-Davidson luck.  I don’t want to see them fail and fade into the sunset.  But the competition has them surrounded by less expensive and potentially equal/better-performing machines.  From my vantage point, Harley is going to need all the luck it can muster.

 

 

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