Harley-Davidson's Livewire Fails To Make Any Noise at All

Livewire One 7 photos
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If you are reading this article, there is a high degree of probability that you have heard of the band AC/DC, and you may even be a fan, as I am. Almost fifty years after delivering their first musical pieces and well into their 70s, the band is still rocking.
The band was formed by two Scottish brothers who formed the group in Sydney, Australia, in the early 70s. The band grew an instant following for their loud, unapologetic brand of in-your-face rock-n-roll. Each ear-splitting performance garnered more attention throughout the world, and by the mid-80s, they had become one of the most recognizable bands in the world.

From a visual perspective, AC/DC was not much to look at, but when the lights were on, they never disappointed their loyal fan base and never strayed from their blues-based, fiery brand of rock-n-roll.

In the event you are not familiar with AC/DC, I have included a video below of the song Live Wire that epitomizes the AC/DC sound.

When was the last time you laughed out loud, sheepishly looked around, and realized you were the only one in the room? Whether it is watching a funny movie or watching a comedian's act, it has happened to all of us at some point.

The most recent solo laugh-out-loud gig for me happened just a few moments ago when I was doing my daily routine of reading the online version of the Wall Street Journal. I happened across an article with a headline that indicated Harley-Davidson's electric motorcycles were having a hard time connecting with investors.

Back in 2021, Harley-Davidson, one of the most recognizable brands in the world, decided to form a separate division of the company to handle the design, development, and manufacturing of its electric motorcycles. As you might well imagine, this did not sit well with the HOG faithful, and their subsequent moves would seem to confirm that assertion.

The name of the division? LiveWire.

After initially selling less than 400 electric motorcycles in 2021, the company boldly predicted this last spring that sales would increase to over 100,000 by 2026. Fast forward to September 2021, the company decided to form a special-purpose acquisition company (SPAC) and spin-off LiveWire to separate it from the tried and true Harley brand and, no doubt, preserve its dignity with the aforementioned faithful and earn investor confidence.

A SPAC is defined as the formation of a publicly traded company for the purpose of acquiring or merging with an existing company.

In other words, Harley-Davidson appears to have formed the LiveWire SPAC to save its reputation among Harley loyalists and raise money through stock sales with the idea of acquiring the company back once it reached its lofty goals.

Well, it turns out that investors aren't buying it. One such investment group withdrew $370 million of the $400 million held by the SPAC, according to regulatory filings. Harley-Davidson has cited the fact that the market has changed with higher interest rates and a slowing U.S. economy; that doesn't fly! Especially when the company reported last week a 21% rise in third-quarter revenue and a 60% increase in net profit from 2021. In addition, the company increased shipments of gas-powered bikes to make up for the production outages earlier in the year

Are we to believe that high-interest rates and a slowing economy only impact electric motorcycles?

It is going to be an uphill battle for Harley-Davidson, the likes nobody has seen in recent memory. What happened is that Harley caved to the climate alarmists and embarrassed their loyal customer base that has been built over the last 100-plus years.

I have to wonder what they expected to happen. Did they think they were going to create a new breed of biker by enticing those clad in Lacoste polos, plaid shorts, and deck shoes to fork over $30,000 for a motorcycle that does not make any noise unless there is a pebble in the tire tread?

The company and its dealers seem unsure of the road ahead; only 60 of the company's 550 dealers even carry LiveWire bikes! How is that for confidence in your own brand?

Motorcycles, by their very nature, are supposed to make noise. Maybe they could sell an accessory that includes a fitment to hold a card that flutters back and forth over the spokes when the wheel is in motion like we did as kids on our Schwinn bicycles. Wouldn't that be cool?

What Harley is attempting to do is appeal to two totally different consumer markets; something AC/DC would never do. Harley-Davidson making an electric motorcycle is tantamount to AC/DC performing a ballad. Harley does not need to reinvent itself, as they have tremendous brand loyalty. Their customers know exactly what they are going to get when a new model comes out; just as AD/DC fans know when the band releases a new album.

The bottom line is this: while AC/DC is not much to look at, they performed as expected each and every time and never abandoned their fan base with a new sound. LiveWire bikes look fantastic but are such a departure from what their fan base expects; investors know it as well.

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