When Harley-Davidson (NYSE:HOG) introduced the liquid-cooled V-Rod in 2001, purists were aghast the bike maker was going over to the dark side with a racing-style bike, rather than staying with its big cruisers -- though the bike eventually became a big seller for them.

Now the iconic bike maker has unveiled a new prototype motorcycle that once again has avid Harley riders' leather in a bunch. Why? Because it's an electric motorcycle.

Can an electric bike get sales to hum? Source: Harley-Davidson.

Project LiveWire made its debut earlier this summer amid a lot of fanfare, but like the V-Rod before it, the e-bike is eschewing the traditional styling in favor once again of the racing-bike vibe. But whereas the V-Rod proved the naysayers wrong, don't expect Harley to mass-produce the e-bikes anytime soon -- or ever, for that matter.

It's understandable why Harley is toying with the idea of an electric bike, but reality might create some speed bumps. 

The graying of America
Harley's core customer is a middle-aged white male. The company notes that for six straight years it has sold more new on-road motorcycles in the U.S. to this group than any other bike maker, while in the premium 601cc-plus segment, Harley sold more than nine times as many new bikes to this core demographic than its nearest competitor.

Unfortunately, those buyers are aging now, and while they have money to spend, they have likely already bought their Harley or have reached an age where riding doesn't happen as often, which has had an impact on sales.

The financial crisis certainly played its part in slashing the number of bikes Harley shipped, but the trend of falling units began before the crisis hit. The number of units shipped peaked in 2006 at over 349,000 globally, and the turndown was evident both in the U.S. and internationally. Last year, even as it has come back well off its lows, shipments were still well below the peak, standing at almost 260,500 units.

Over the first six months of 2014, Harley has shipped over 172,000 motorcycles, or 8% more than last year, which if the run rate holds true would only put it at 281,000 for the year. However, we do know the back half of the year is the bike maker's weakest period. Harley might still dominate, but the customer who put it on top isn't its future.

Harley's still trying to get its motor running again. Data: Harley-Davison SEC filings.

The riders coming behind Harley's core customer are a very different breed, belonging to one or more of four categories: they're young -- 18 to 34 -- female, black, or Hispanic. You may have noticed Harley starting to cater to this new customer, what it calls its "outreach" customer.

Its 883 Super Low was introduced in 2011 to help beginning riders and women acclimate themselves to motorcycles. Last year's Street 500 and 750 models were targeted at young, urban riders. The V-Rod was for young males with a need for speed. An electric bike, with racing-style lines and Prius-like marketing roadshow, is geared more toward this new demographic.

"Loud pipes save lives"
The problem for Harley is the very thing that has sustained it for so long: its image. Forget mystique of the leather-clad Marlon Brando in The Wild Ones: Harley-Davidson bikes have a reputation for not only being big, but loud.

Many, if not most, Harley owners swap out their stock pipes for aftermarket ones that allow for the distinctive burble at idle and its full throaty roar when opening up the throttle.With an electric bike, since there is no internal combustion going on, there's no sound. Harley does its best to imbue the LiveWire with some energy by likening it to "a fighter jet on an aircraft carrier," but less exuberant views have compared it to "an oversized vacuum."

While that may have some appeal to the outreach customer, and as much as Harley says sales to them are rising faster than to its core customers -- at twice the rate, in fact -- it seems even those riders prefer the more traditional bikes to the sportier models.

Everything old is new again
Over the past two years, quarter unit shipments of its touring bikes have grown 15.5% on average, while its custom bikes -- which include the V-Rod, Dyna, Softail, and CVO models -- have grown less than 7%. Its Sportster and Street models are up less than 8% on average.

While the Sportster/Street group saw shipments 14% and 13% higher in the last two quarters, respectively, that encompasses the period immediately following the introduction of the Street 500 and 750. In the fourth quarter of 2013 they shipped just 6% more bikes from the year-ago period while they were down 26% in the third quarter.

Bigger is better. Data: Harley-Davidson SEC filings.

In fact, over time, custom and Sportster shipments have been fairly stable, rising and falling within a prescribed range depending on the season; it's Harley's bigger bikes that continue to move the needle higher.

There's no doubt Harley's LiveWire is cool, and because the power is instantly available to the rider, it can go from zero to 60 mph in just four seconds. But there's only a limited market for them. Here in the U.S., Zero Motorcycles, Terra Motors, and Mission Motors are all selling e-bikes today, just not many of them. Zero, which is is the industry leader, is expecting to sell just 2,400 bikes this year. 

There's no shake, rattle, and roll with the Project LiveWire, which goes from 0 to 60 in a zippy four seconds. Source: Harley-Davidson.

According to Navigant Research, expected global annual sales of e-motorcycles will grow from 1.2 million vehicles in 2014 to 1.4 million in 2023 -- but virtually all of that demand is concentrated in China, which accounts for 98% of worldwide sales. The real demand is in electric scooters, however, where Navigant forecasts annual sales will grow from 4.1 million to 4.6 million by 2023. Over the next decade, a cumulative 55 million e-bikes and scooters will be sold globally.

People didn't think Tesla could mass produce an all-electric car either, but motorcycles still have to overcome technological limitations. The Project LiveWire bike only has a range of about 50 miles and the battery takes three-and-a-half hours to charge. 

Right now, it's a prototype, and further research and development would likely improve all that. And Harley's entrance would certainly raise the industry's profile. Zero Motorcycles said that on the day Harley unveiled LiveWire, traffic to its website doubled.

Beyond the meager market for an electric motorcycle overall, a Harley-Davidson electric bike already seems like a nonstarter because its core customer and the so-called outreach ones both still buy into the aura and image of its loud and proud heritage. Both groups have proved they largely still want the traditional styling too, and for that reason a mass-produced Harley e-bike is a nonstarter.

As cool as it is, a Harley e-bike likely won't move far beyond the prototype phase. Source: Harley-Davidson.