Please ensure Javascript is enabled for purposes of website accessibility

The Harley-Davidson LiveWire Sticker Shock Begins

By Rich Duprey - Oct 13, 2019 at 11:30AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Market acceptance of the new electric motorcycle looks like it is getting short-circuited by its high price.

The LiveWire electric motorcycle from Harley-Davidson (HOG 1.32%) is just beginning to show up in dealerships, and the response is just about as expected. There's reportedly a lot of interest in the bike -- at least until people see the price tag.

Worse, although the LiveWire was designed with the millennial biker in mind, it's not younger motorcycle buyers who are interested, but existing Harley customers. This could be a more problematic product launch than anticipated.

Man riding LiveWire electric motorcycle

The Harley-Davidson LiveWire electric motorcycle. Image source: Harley-Davidson.

Nosebleed territory

It's no surprise that the $30,000 sticker price on the LiveWire was going to be off-putting. When Zero Motorcycles is selling similarly sized electric motorcycles for one-third to one-half the price of a LiveWire, and Lightning Motorcycle plans a comparable bike for under $13,000, it seems clear Harley misjudged the market.

Reuters reports that dealers may be disappointed with how it's playing out, quoting one as saying, "Interest is very high, but once you get to pricing, interest is thrown out of the window."

That's because millennials might not be able to pay that much for a bike they otherwise might be interested in. With college debt a burden, young consumers are delaying house purchases, and shelling out enough money to buy a midsized car or small SUV just isn't prudent for a two- or three-season vehicle.

Not enough buyers

Even if Harley's older core customers do buy the bike, it's still a problem. Harley had hoped to bring in new blood to replace those who are aging out of the market. It wants to have 4 million new Harley riders by 2027, but analysts estimate only 400 to 1,600 LiveWires will be sold in the first year, less than 1% of total worldwide sales. 

It won't be nearly enough to offset declining sales of its traditional motorcycles, but Harley-Davidson says that's actually part of the plan. The motorcycle maker intends to use the LiveWire as a halo product to cast a glow on the other, presumably cheaper, electric motorcycles it will be introducing. Consumers might not be able to afford a LiveWire, but they might be motivated to buy one of the others based on the excitement LiveWire generates.

Yet that excitement might not last, either. There are rumblings the LiveWire rollout isn't going smoothly and customers are unhappy.

Getting their wires crossed

The LiveWire was originally supposed to hit dealer showrooms in August, but that was pushed back to September, and they began shipping toward the end of the month. Some dealers that were supposed to get them at that time still won't get them for another week or two at least.

In speaking with current and former Harley dealers, I heard that there may have been a software problem that is causing the delays. One dealer told me he understood it had to do with when the brake light on the bike would come on, and he believe Harley was delaying the shipments until it was resolved.

I then called Harley-Davidson's investor relations department, and a Harley representative told me that the bikes had indeed shipped at the end of September. Yet  some dealers are hearing from customers, particularly those who have placed deposits on the LiveWire. They are reportedly angry over delays and are considering canceling their orders.

Such glitches, if they exist, might be expected from as big a rollout as Harley-Davidson is undertaking with a motorcycle far removed from its grease and gasoline heritage. But they would speak to a deeper problem with slack sales that will only be exacerbated by the high price of the LiveWire.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Harley-Davidson, Inc. Stock Quote
Harley-Davidson, Inc.
$42.26 (1.32%) $0.55
Tesla, Inc. Stock Quote
Tesla, Inc.
$908.61 (-0.37%) $-3.38

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.