Harley-Davidson defends LiveWire branch after drop in stocks

The LiveWire electric motorcycle unit of Harley-Davidson Inc. debuted on the stock exchange was unsuccessful. Jochen Zeitz, CEO of Harley-Davidson Inc. ignores that fact and says it's the right strategy for a manufacturer with a 119-year history.

The autonomous electric motorcycle brand LiveWire Group Inc. has split from Harley-Davidson. Its merger with AEA-Bridges Impact Corp was completed on September 27. This earned $295 million, far less than the expected amount. The deal was announced last December and was expected to earn $545 million.

Presently, Zeitz will serve as the acting CEO of both companies. He said that he has a business plan for which the unprofitable LiveWire company has the money to implement. Zeitz expects it to be profitable by 2026. It was a right move to split out the LiveWire. Later, when battery technology will be improved, Harley-Davidson's trademark heavy motorcycles will also be subjected for electrification.

The New York office of Bloomberg was able to interview Zeitz. To bring clarity to the operation, he said that he believes in a brand separation strategy, rather than creating brands based on market action when going public.

Zeitz looked away from the stock market fall, saying he wasn't a day trader.

Harley-Davidson is known for its heavy motorcycles with roaring V-twin gasoline engines. In 2019, the company introduced its first electric motorcycle. Its sales were limited to its price of $30,000. Zeitz was a board member for more than 10 years. In 2020, he became CEO and said that this motorcycle confused consumers specifically because it was marketed under the Harley-Davidson brand.

The release of this model under the Harley-Davidson brand was stopped, and last year it came out under the LiveWireOne brand with a price tag of $22,799. Next spring a less expensive S2 Del Mar will be available for purchase. LiveWire has developed an electric drivetrain and software for in-home battery management. Additionally, the Taiwanese manufacturer Kymco is a contract partner of the company, so it can help to cover Asian markets.

The cost of accumulators went up last year. Zeitz said the price is unpredictable and it is unclear whether or not rising interest rates and a potential recession will affect LiveWire and Harley's growth plans.

Harley-Davidson owns the controlling stake of LiveWire. Since the deal was announced in December, Zeitz will remain CEO of LiveWire for 2 years. He does not exclude the possibility of supporting or raising additional capital if the profitability of the affiliate is difficult to achieve. He noted that the company plans to be the first operating manufacturer of electric motorcycles, so the risk is reasonable.

Zeitz commented that becoming the first in this direction is a unique and risky opportunity, and expressed a preference for taking the lead in this direction rather than "dancing around the discussion," as many automakers did when Tesla was ahead of them.