Because Harley-Davidson (NYSE:HOG) has invested so much time, money, and effort into its electric motorcycle future, it may have forgotten that its gas- and grease-driven bikes are still the ones that make money.

An analyst at Wedbush Securities says that though the new Livewire electric bike is generating some optimism among dealers, many are grumbling that the rest of the motorcycle lineup Harley introduced for the 2020 model year is uninspiring because it consists mostly of minor updates to existing bikes. 

If Harley-Davidson can't spark a turnaround before an inevitable economic slow down -- they do happen, folks -- consumer spending on discretionary items like motorcycles may evaporate further and call into question the viability of the bike maker.

A rider on a Harley-Davidson Livewire electric motorcycle

Image source: Harley-Davidson.

Sales are looking bleak

Wedbush analyst James Hardiman told investors in a note that channel checks indicate third-quarter sales are down between 5% and 10% with a month to go in the period. 

That's especially worrisome because U.S. sales in the year-ago third quarter cratered more than 13% to just 36,200, a decline so bad that not even during the collapse of the financial markets did Harley sell so few motorcycles during a period. 

Chart of Harley-Davidson quarterly U.S. sales

Data source: Harley-Davidson SEC filings. Chart by author.

The second and third quarters tend to be Harley's best because they encompass the spring and summer months, when people want to buy motorcycles and get out onto the open road. As winter approaches, riders naturally turn to pursuits other than bike riding. But now, it's looking like Harley-Davidson won't be able to get over even that low hurdle.

Easy come, easy go

Although it may be that motorcycle buyers are waiting for the 2020 model year bikes to hit the showroom floors before making a purchase, Harley eliminated more bike models than it introduced, choosing instead to offer incremental changes to the existing lineup that remained.

For example, beyond the Livewire, Harley reintroduced the Low Rider S after a two-year hiatus, possibly to mollify the bike maker's customers who railed at its decision to get rid of the Dyna platform in 2017 in favor of a Softail-Dyna mashup. The new bike offers a Dyna-like club-style cruiser ride.

Also new will be the Road Glide Limited, which replaces the Road Glide Ultra it did away with, and a high-end CVO Tri Glide, which combines the existing trike with the luxury associated with CVO models that will start at $49,000.

Joining the Road Glide Ultra on the scrap heap will be a handful of Sportsters, including the Forty-Eight Special, Superlow, and 1200 Custom. 

Pricing could be key

Part of the problem Harley may face in moving older bikes is it apparently held the line on pricing, as Hardiman says across models, prices have essentially remained flat. That means dealers could have a harder time selling the older 2019 bikes in their showrooms, though it does narrow the differential between new and used bikes.

Harley's penchant for not discounting its motorcycles and raising prices with each new model year has kept the gap between new and used motorcycles wide, a factor even the motorcycle company admitted has weighed on sales. It has noted in recent quarters that the gap has been narrowing, and the bike maker's decision to not raise prices across the board should help.

Still, if the channel checks are accurate, it may not be the biggest factor holding back buyers. It's becoming a consensus opinion that millennials are not fans of motorcycle riding, and with baby boomers aging out of the market, Harley is stuck in the middle. That's why we're seeing the Livewire go live now and why so many electric vehicles will be introduced in the very near future.

There's still a lot of doubt about whether Harley-Davidson can make the transition -- or if it can do so before it's too late.