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Author Topic: How long before Zero gets gobbled up?  (Read 4584 times)

MostlyBonkers

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How long before Zero gets gobbled up?
« on: October 12, 2015, 12:53:49 PM »

It seems that the big motorcycle manufacturers are just waiting for the variables to improve a bit more before entering the market.  When they decide to take the plunge, will one of them buy Zero? Or will they just release far superior products and let Zero wither and die?

I'm betting on 2020 being a big year for changes in the electric motorcycle industry. I don't know if Zero is a privately owned company still, but if it is then providing they can build their reputation within the next few years (and dealer support), then they may just stand a chance of hitting the big time without being taken over.

Any thoughts?

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GBEV

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Re: How long before Zero gets gobbled up?
« Reply #1 on: October 12, 2015, 05:40:05 PM »

Not sure but wouldn't any take over bid raise Zero's investability status and any existing equity value and , at least in part, provide more access to debt funding or raising private equity and/or venture capitital to help them go it alone?

Existing investors (think I read venture capitalists are in) would have to decide are we in it long term? Or is this outside buy out deal just too good for that?

If it is the former, they think that isn't enough of a bid.
If it is the latter, they think they have been paid more than the going price.

The biggest danger I see from our P.O.V. is the buyout is just the means to stop competition before mass market sales kick in and whilst the buy out is consequently still cheap and that could be Mr Honda or H.D. who may or may not be able and willing to provide a better product for the price.
« Last Edit: October 12, 2015, 05:46:49 PM by GBEV »
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teddillard

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Re: How long before Zero gets gobbled up?
« Reply #2 on: October 12, 2015, 05:54:39 PM »

This is part of a discussion I've been having for a while now, but my focus has been more about "how long before the big manufacturers get into the market" rather than a buyout of Zero.  For my money, what with Polaris' moves, I'm predicting 2016.  The timing of my book was due, in a big part, to that belief.  That said, I'm thinking one major mfr, not a bunch of them. 

Harley?   Fuggetaboutit.  ;)

Really, though, the thing anyone has to understand about the big boys is that they're looking for astronomical sales numbers, by electric motorcycle standards.  Energica's Livia Cevolini has told me she's looking for 500 units sold for their first model year.  I'm not entirely sure, but I'm under the impression that Honda is looking for a couple of more zeros on that number before they consider it. 

Speaking of Honda, every time Mugen races we get back into that discussion.  Honda clearly is toying with R&D, and Zero is doing them a huge bit of free market research, but buying them out?  They don't need to, I doubt they want to, and consolidating the market at this stage isn't going to do anyone any favors in terms of selling 50,000 units a year. 

I also think it's important to understand that Polaris bought out Brammo at fire-sale prices, basically due to very low delivery of sales predictions.  In a lot of ways, it can be seen as cutting their losses rather than trying to enter the market in any real way. 

I think I need more coffee - did that make sense?  :D
« Last Edit: October 12, 2015, 05:59:33 PM by teddillard »
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GBEV

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Re: How long before Zero gets gobbled up?
« Reply #3 on: October 12, 2015, 07:18:21 PM »

As far as I can acertain by an internet search, no EV manufacturer has ever been gobbled up unless it is been preceded by lots of smoke attached to a slow burning fire sale.

So history suggests for Zero to be "gobbled up" at any time it will need to be deemed a binary dead cert success or failure by the buyer.

In the former case that possibility could be to protect loss of future sales from a legacy ICE manufacturer who thinks it might lose sales to Zeros' offerings, dunno who though. There is no guarantee that building electric bikes would be their motivation ;).

However the timing of either of those outcomes will undoubtedly be very different IMO.
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Richard230

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Re: How long before Zero gets gobbled up?
« Reply #4 on: October 12, 2015, 08:12:44 PM »

I think government emission regulations (rather than the marketplace) will ultimately result in more electric motorcycle sales and perhaps the requirement that large motorcycle manufacturers will be required to market EV's if they still want to sell gas-powered vehicles. (Kind of what is going on in CA right now.) If that happens and the requirements stick, I think you will see more market activity and interest in electric motorcycles.  I agree with Ted that Honda and Yamaha (and probably Kawasaki) would want to design electric vehicles in-house.  BMW is no doubt already designing their own electric motorcycle line, KTM won't be far behind and who knows what Ducati and Triumph are thinking about right now.

If anyone was going to buy out Zero so that they could jump into the marketplace without doing it the hard way, I would put my money on Suzuki or Triumph. H-D might be forced into the market (kicking and screaming) and they could also be a suitor for Zero if they thought the LiveWire (or its production prototype) was just going to be too much trouble to manufacture.

All this changes, of course, if there is a shooting war in the Middle East that stops the flow and transportation of oil from that location. If that should happen and oil prices go through the roof, or oil becomes scarce, then EV sales would skyrocket, the industry would finally get rich and mature - and battery prices would finally go down due to their mass production (assuming enough raw materials to make them can be discovered).
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Richard's motorcycle collection:  2014 14.2 kWh Zero S, 2016 BMW R1200RS, 2011 Royal Enfield Bullet 500 Classic, 2009 BMW F650GS, 2005 Triumph T-100 Bonneville, 2002 Yamaha FZ1 (FZS1000N) and a 1978 Honda Kick 'N Go Senior.

benswing

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Re: How long before Zero gets gobbled up?
« Reply #5 on: October 12, 2015, 08:24:20 PM »

Nobody is going to jump into the market and immediately undercut Zero. They have done a lot of hard work to get to their price point. Even with the benefits of being a current manufacturer, the batteries still cost a lot of cash.


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teddillard

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Re: How long before Zero gets gobbled up?
« Reply #6 on: October 12, 2015, 08:52:02 PM »

Good point, but the big guys can afford to sell at a lower margin, or even at a loss to get market share, right?   8)
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Doug S

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Re: How long before Zero gets gobbled up?
« Reply #7 on: October 12, 2015, 09:48:28 PM »

Nobody is going to jump into the market and immediately undercut Zero. They have done a lot of hard work to get to their price point. Even with the benefits of being a current manufacturer, the batteries still cost a lot of cash.

I'm not so sure. If Honda were to decide they wanted to get into the EM market, even a small-volume model would probably get a lot better pricing than Zero can. Honda has far more horsepower than Zero even for a niche product....a lot of battery manufacturers would do just about anything to get their foot in the door at Honda.
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GBEV

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Re: How long before Zero gets gobbled up?
« Reply #8 on: October 12, 2015, 09:55:22 PM »

If Honda EV cars are anything to go by they, like Toyota, believe in Fool Sells and Hydrogen being the future which IMO it always will be, a fake disruptive technology to undermine EV sales whilst being promoted by liquid fuel sellers with big political lobbying clout to keep the oil flowing and save the ICE :'(
10,000 psi Hydrogen bomb motorcycle anyone? ;D
« Last Edit: October 13, 2015, 12:26:19 AM by GBEV »
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benswing

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Re: How long before Zero gets gobbled up?
« Reply #9 on: October 12, 2015, 11:37:22 PM »


Good point, but the big guys can afford to sell at a lower margin, or even at a loss to get market share, right?   8)

Right, they could sell at a loss.


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First to 48 states all electric!
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 - Crossed the USA in 2013 on a 2012 Zero S with the Ride the Future Tour, see the movie at https://vimeo.com/169002549

Richard230

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Re: How long before Zero gets gobbled up?
« Reply #10 on: October 13, 2015, 02:54:31 AM »


Good point, but the big guys can afford to sell at a lower margin, or even at a loss to get market share, right?   8)

Right, they could sell at a loss. 


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And that is something that Zero can not do.  They have no other product to subsidize a loss-leader. 
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BenS

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Re: How long before Zero gets gobbled up?
« Reply #11 on: October 13, 2015, 05:36:53 PM »

...BMW is no doubt already designing their own electric motorcycle line, KTM won't be far behind and who knows what Ducati and Triumph are thinking about right now...
KTM are selling electric dirt bikes(including street legal) already, they said they wanted to keep initial sales in Europe to see how things go, then sell globally. I'd love to own one; I think it'd be much better suited to dirt than my Zero(but so it should, 'cause KTM have a lot more experience at building dirtbikes than Zero), but it only has about a 2.6kw battery, and I'm guessing it'll be pricey when/if released here in Oz.
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cloroxbb

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Re: How long before Zero gets gobbled up?
« Reply #12 on: October 21, 2015, 02:55:41 AM »

Good point, but the big guys can afford to sell at a lower margin, or even at a loss to get market share, right?   8)

I think Polaris has shown, that so far, no one is trying to do that. Probably since market share is very low as it is anyway. Polaris is repurposing a Brammo and making it more expensive... Goes to show (me) that they are charging for the badging. They think you should pay THEM for the Victory name to on your electric bike.


To add for the thread:

I highly doubt Zero would get "gobbled" up, just like Tesla won't. Zero are really the only ones pioneering here, and their experience will give them the edge when it comes to price. They can continuously refine their battery and everything using that experience to cut costs. Any new Electrics, even by the "old timers" are going to be subject to "starting anew" because they can't take their ICE experience and directly correlate it to Electric. Polaris at least has an advantage since they bought that experience in Brammo. But they chose to increase price and not try to dethrone Zero.

Zero are the ones to beat. Honda, Suzuki, Kawasaki etc... are NOT going to automatically destroy Zero, by putting out an electric bike, just because they are household names.
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NoiseBoy

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Re: How long before Zero gets gobbled up?
« Reply #13 on: October 21, 2015, 03:43:42 AM »

Zero will never ever be able to compete on price with the big manufacturers until they are pushing 10k units a year at least.  If Honda decided to mass market an electric motorcycle they could comfortably spend more just on advertising than Zero's entire annual revenue.

If a big player decides to get involved within the next few years, before Zero has established significant market share, we all better hope that one of the big names buys Zero because otherwise they just won't be able to compete.  Zero's business plan almost certainly revolves around either selling up or licensing to a large company.
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Richard230

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Re: How long before Zero gets gobbled up?
« Reply #14 on: October 21, 2015, 04:22:54 AM »

I keep thinking that Victory/Polaris is just selling the Empulse TT to stick it to H-D.  Right now I am not sure if they are going to stay in the EV market if sales do not increase and become profitable for their retail dealers.  They may get a lot of pressure from their dealers to drop the bikes if the market doesn't pick up quickly.   ???
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Richard's motorcycle collection:  2014 14.2 kWh Zero S, 2016 BMW R1200RS, 2011 Royal Enfield Bullet 500 Classic, 2009 BMW F650GS, 2005 Triumph T-100 Bonneville, 2002 Yamaha FZ1 (FZS1000N) and a 1978 Honda Kick 'N Go Senior.
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