Harley-Davidson announced plans to take its LiveWire brand public. This means it will be the first publicly-traded electric motorcycle company in the US.
Expectations are that the move will result in $545 million in proceeds. That money will be used for development. At the same time, Harley announced the second generation LiveWire electric powertrain called Arrow.
Let’s take a closer look at these recent developments.
Taking LiveWire Public – What the Future of the Business?
First off, you might be surprised to learn that Harley-Davidson is partnering with Kymco and AEA-Bridges Impact Corp (ABIC) to finance LiveWire. It’s this partnership that lets LiveWire go public without having to go through a typical IPO itself.
ABIC puts $400 million into a trust pending no redemptions for its shareholders. Harley and Kymco will each invest $100 million. Harley keeps 74 percent equity of LiveWire. ABIC will get 17.3 percent for shareholders. Kymco will hold 4.3 percent. ABIC’s founders John Garcia and Michele Giddens each get about 4.3 percent.
According to Motorcycle.com, Jochen Zeitz, Harley-Davidson’s chairman and CEO, will also head up LiveWire for two years after this transaction. Ryan Morrissey will serve as the company’s president.
With Zeitz seemingly steering the ship correctly (Harley saw a good Q3 in 2021 and things seem to be moving in the right direction), this is probably a very good move.
This transaction is expected to close in the first half of 2022. Common stock will be listed on the New York Stock Exchange under the symbol LVW. Enterprise value is expected to be about $1.77 billion and post-money equity value is estimated at $2.31 billion at closing.
Harley is banking on the idea that electric motorcycles will expand market penetration. Right now, few are sold. However, if it sees a noticeable uptick in the number of electric bikes being sold, it could dawn a whole new age with LiveWire at the forefront of the industry.
The New Arrow Electric Powertrain from LiveWire
Now let’s get to the fun part, the new powertrain tech. Arrow is a scalable modular system developed exclusively for LiveWire’s bikes.
Right now, LiveWire only sells one bike, the LiveWire One. That will remain at the top of the list of offerings. Soon, Harley will have the LiveWire S2 models and LiveWire S3 models, and heavyweight LiveWire S4 models.
The Arrow powertrain will be shared across multiple models. It offers various configurations of the motor, battery, inverter, and onboard charger.
According to documentation from the brand, all of the technology will be cutting edge. I’ve included some screen grabs from LiveWire below so you can see the specifics of the various components.
LiveWire’s next model will be a middleweight bike based on this new Arrow powertrain. The same design will then be adapted to fit the various segments within the industry.
When the L3 bikes come around, they will also utilize the Arrow design, but the architecture will be scaled down. These models will be developed by Kymco and will be considered light motorcycles.
Once we get to L4 motorcycles, though, we’re back in the Harley territory because those will be what’s considered heavyweight motorcycles. The goal here will be to focus on range and charging efficiency, so these will likely be touring motorcycles.
According to the investor presentation, it appears as though LiveWire will stay out of scooter categories at least in the near future. This goes against some of the previous electric concept bikes we’ve seen, but in all honesty this likely makes sense. It’s not a core competency, though Kymco could potentially help there.
With that said about electric scooters, there’s always the chance that scooter products could be released under the STACYC brand. That brand currently sits under Harley, but it will move to be under LiveWire, which makes perfect sense as all of STACYC’s bikes regardless of size will be electric.
There are still a lot of unanswered questions for LiveWire, but the picture is beginning to take shape. My advice? Sit back and watch. I wouldn’t buy one of these bikes initially, but I do firmly believe LiveWire and Harley-Davidson as a whole are heading in the right direction.
