LiveWire Motorcycle Stock: Should You Invest in Electric Motorcycles?

LiveWire is about to become the first publicly traded U.S. e-motorcycle company. Here’s what you should know.

Ben Carson   Updated January 29th, 2022

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What’s going on with LiveWire?

Harley-Davidson’s electric motorcycle brand, LiveWire, is going public in the first half of 2022 through a $1.77 billion SPAC merger. On December 13, 2021, Harley-Davidson announced that LiveWire will merge with a sustainable investing SPAC, AEA-Bridges Impact Corp (IMPX), and become the first U.S. publicly traded electric motorcycle brand. LiveWire will be listed on the New York Stock Exchange under the ticker LVW.

SPACs did not have a good year in 2021, and some high-profile deals have been canceled. Market volatility in January 2022 and the sell-off in formerly hot EV stocks like Rivian and Lucid Motors haven’t helped either. So far, though, the LiveWire spin-off appears to be on track.

What does LiveWire do exactly?

Right now, LiveWire sells just one electric motorcycle model, LiveWire One, which costs $22,000. LiveWire One boasts almost 150 miles of city range and two charging options. The model went on sale in 2019 and was criticized for costing too much, around $30,000 at the time.

Credit: LiveWire

LiveWire’s goal is to introduce three more models in the future. The business will also include STACYC, a brand making electric bikes for kids.

LiveWire sees opportunities to make money beyond selling motorcycles. They want to sell software and subscriptions, general merchandise, parts and accessories, and provide consumer financing.

LiveWire is not the only company making electric motorcycles. In the U.S., competitors include e-motorcycle startups Zero and Lightning. There is also Italy’s Energica, which sells into the U.S. market, and Canada’s Damon Motors.

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What will the standalone LiveWire look like?

If the spin-off goes as planned, LiveWire will be valued at $1.8 billion. Harley-Davidson is likely spinning off the e-motorcycle division to highlight LiveWire’s valuation. Even so, $1.8 billion looks low compared to electric car and truck startups like Rivian (RIVN) and Lucid Motors (LCID). Though these companies have limited sales or revenues, their stock is valued at $51 billion and $41 billion despite the recent sell-off.

According to the investor presentation, LiveWire expects to sell 387 units and generate $33 million in revenue in 2021. They also expect to sell over 100,000 units and get $1.8 billion in sales by 2026, when they believe the business will be profitable. Buying this business at 1x 2026 revenues may look appealing, but the company needs to deliver and prove that the market for e-motorcycles actually exists.

Harley-Davidson expects that 10% of motorcycles sold in the U.S. in 2026 will be electric, an increase from around 1% at the moment. It also estimates that the worldwide market for electric motorcycles will exceed $10 billion in 2026.

As part of the listing, LiveWire will get around $545 million, which it plans to spend on developing new products, speeding up its go-to-market model, and improving its global manufacturing.

Harley-Davidson will continue to own most of the stock in LiveWire (74%, to be exact). A new co-investor, KYMCO, a Taiwanese scooter manufacturer, will own about 4%.

LiveWire plans to leverage Harley-Davidson’s extensive dealer network selected from 1,400 global locations.

Jochen Zeitz, Chairman, President and CEO of Harley-Davidson, will serve as Acting CEO of LiveWire for up to two years following the spin-off.

What’s the takeaway?

LiveWire will be the first publicly traded electric motorcycle company in the U.S., and its valuation looks lower than that of the likes of Rivian and Lucid Motors. But motorcycles are a smaller market generally, and LiveWire sold fewer than 400 units so far. And it remains to be seen if Harley-Davidson’s traditional customer base embraces the switch to much quieter electric bikes.

LiveWire remains a show-me story.

🔔 Curious about other e-bike stocks? Check out this list of e-bike and scooter stocks.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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