Polaris Industries (PII 0.99%) will make an electric motorcycle after all: just not yet. 

The powersports vehicle manufacturer has entered into a 10-year partnership with EV bike maker Zero Motorcycles. The partnership will focus on electric off-road vehicles (ORVs) and snowmobiles first, but Polaris wants to have an EV across every one of its product lines by 2025.

That means there's an electric Indian Motorcycle in the future, but whether it can fare any better than Harley-Davidson's (HOG 0.56%) LiveWire white elephant remains to be seen.

Two snowmobiles racing

Image source: Polaris Industries.

The problem of profits

Historically, Polaris CEO Scott Wine has been lukewarm to the idea of an electric motorcycle, previously saying if someone could show him how to make money with such a product, "we will be all in." 

While Zero may have shown him how it's possible, Wine sees a bigger opportunity in off-road vehicles, telling Yahoo! Finance:

Zero has proven that they know how to do this. They've had the best-selling electric motorcycles in the world. And certainly, we've had discussions about motorcycles. But we see such an opportunity right now in off-road vehicles and snow. We said let's put that aside for a while.

Under the 10-year exclusive agreement, Polaris will develop, manufacture, and market electric ORVs and snowmobiles using Zero's powertrain technology, hardware, and software.

Zero CEO Sam Paschel said the companies will co-develop the technologies and vehicle platforms for a new generation of EVs with the aim of "dramatically expanding the electric options in powersports."

Short-circuiting growth

While Tesla and others have proven there is a viable market for all-electric cars, a similar case hasn't been made yet for motorcycles, notwithstanding Zero's leadership in the space.

While electric scooters and bicycles have found a vibrant global market, large heavyweight electric motorcycles have not. Harley-Davidson missed a big opportunity to create a market out of nothing when it chose to make the LiveWire prohibitively expensive.

The vanity project had hiccups right out of the gate, forcing Harley-Davidson to suspend sales for several days as it corrected a manufacturing problem. In any case, the LiveWire's $30,000 price tag led to dismal sales.

Part of the problem may have been Harley's decision to assume all of the responsibility for the LiveWire's design, development, and marketing. Although I had suggested the bike maker might have been better off creating a separate company to handle the LiveWire, Polaris is showing that partnering with a proven leader in the industry may be the best option.

Hinting at a longer-term partnership

I can also see the partnership growing into an acquisition of Zero over the deal's 10-year run -- or at a minimum, an investment in the company as Ford has done with EV maker Rivian. After all, Polaris acquired EV motorcycle maker Brammo in 2015 before folding it when it closed down its Victory motorcycle business, so it has experience in the field. It also sells electric GEM low-speed utility vehicles and EV Ranger side-by-side utility terrain vehicles.

Yet an electric Indian could offer serious competition to Zero's own motorcycles. By helping Polaris develop an EV bike of its own under a brand that has proven very popular even as the overall motorcycle market has contracted, Zero would be effectively undermining its own business. There would have to be a payoff in some fashion for the EV bike maker.

Right now, though, the focus is on ORVs and snowmobiles.

The latter seems like a harder nut to crack. While Polaris, BRP, Arctic Cat, and Yamaha lead in snowmobile sales, only a start-up named Taiga is actually making e-sleds. The problems remain much the same as they were with cars: high prices, short range, and a lack of charging infrastructure. That suggests the first vehicle out from the new partnership may be an ORV, which is wholly in Polaris' wheelhouse.

Not ready to rev up

An electric Indian motorcycle may come sometime down the road, but Wine still may not be convinced it can be profitable enough, despite his glowing praise of Zero. 

If Polaris and Zero can make a big enough -- and profitable enough -- splash with ORVs and snowmobiles, Harley-Davidson's LiveWire may eventually get some big-name competition.