This part of the forum has been dead for a while, so I thought I’d mention the three (OK, two and a fraction) ways to get exposure to the largest players in the high-performance electric motorcycle industry. Feel free to add information about exposure to other brands.
Livewire: The first company is obviously
Livewire (LVWR). Harley Davidson spun its Liveware division into a SPAC earlier this year. Livewire sells full-sized motorcycles under its own brand and the STACYC brand of balance bikes. In fact, Livewire generates three times as much revenue from STACYC bikes as Livewire bikes.
- Livewire’s full-sized bikes are produced under a contract manufacturing agreement with Harley Davidson, which makes them at the big plant in York, PA. Livewire makes STACYC bikes through assemblers in Taiwan.
Livewire’s gross margins hover around zero, so after operating expenses the company is losing a ton of money. On the other hand, Livewire has bucketfuls of cash after the SPAC merger.
Livewire is the only “pure play” exposure to the EV sector, though as noted most of that exposure is mostly to the sub-highway bike segment of the market.
Since Harley retains a near-90% ownership of Livewire, you can get indirect exposure to Livewire through Harley Davidson (HOG), though the investment is a tiny fraction of HOG’s total value.
Energica: After a tender offer in Italy earlier this year, around 70% of Energica is owned by publicly-traded
Ideanomics (IDEX). Energica makes only the Energica motorcycles, though it is working on adapting its technology to other applications like boats and tractors and was thinking about entering the smaller-bike market. The other 30 or so percent of Energica is owned by Livia Cevolini, her family, and early investors.
- Financial information on Energica is more difficult to get than it is for Livewire and that will continue as Ideanomics will probably not give detailed results on the company. Prior to the merger, Energica had a similar profit story as Livewire: Gross margins near zero, and the company producing losses as a result. For the nine months to September 30, Energica had revenues of $8.8 mm and a loss, also of $8.8 mm. Unlike Livewire, Energica manufactures its own bikes and many of the components.
Energica’s new parent company, Ideanomics, seeks to become a conglomerate of EV and related businesses. After investing heavily in the China EV market (and losing all of it), Ideanomics is now comprised primarily of a company that retrofits vehicles to hydrogen fuel cells or battery electric called US Hybrid, an electric tractor company called Solectrac, and WAVE, which is developing wireless charging for large trucks. Energica is another part of the conglomerate, though it has a separate shareholder agreement and management structure.
All of Ideanomics’ businesses operate at a loss (including a couple of unrelated businesses like a title-search company), and the loss for the nine months was more than $100 mm. Ideanomics is also liquidity-constrained and faces substantial dilution in the near future. After various writedowns and considering the stock price, the Energica investment makes up the majority of the company’s value, though how much of that value accrues to common shareholders is a fair question.
Zero: Zero motorcycles is private. But in its most recently announced round of funding, Zero disclosed that two public companies had invested.
Polaris (PII) and
Hero Motorcorp (On India’s national stock exchange) both participated in the round. Zero did not disclose how much each invested, but the entire round was only $107 mm, so the amounts are small in comparison to the companies that made the commitment.
- Because it is private, there is little known about Zero's financials other than the company has delivered approximately 20,000 bikes since its inception.
Polaris owns the Indian and defunct Victory motorcycle brands and purchased the electric motorcycle assets of Brammo when that blew up, briefly producing the Victor Empulse.
Hero Motorcorp is among the largest manufacturers of two-wheeled vehicles in the world, focusing on scoots and smaller motorcycles. It just launched its first Electric scoot under its Vita brand.
