By Scot Harden
First, Harley-Davidson is now very close to launching the much-anticipated LiveWire as a 2020 model and has also purchased electric BMX startup company STACYC. Zero Motorcycles, the largest and most experienced electric motorcycle manufacturer, continues to make steady progress with its impressive new SR/F. In addition, Honda has released info on a new motocross model under development.
Lightning has resumed limited production of its high-tech sportbike and Energica continues to fight the good fight even after the disastrous fire that took out the entire MotoGP exhibition fleet, albeit with minimal sales to show for it. Fellow Italian electric motorcycle manufacturer Tacita is producing amazing prototypes but still has to deliver serial production in quantities.
KTM tested the waters in the U.S. with its electric Freeride in 2017 and is now moving forward with additional units for release in 2020 as well as a major push with electric versions of its mini-line. In fact, KTM is quite bullish about its kid's line of electric mini-cycles in the short term and the future of electric in general. All the other OEMs have at least some sort of electric motorcycle development program in place just biding time until they believe market conditions are right.
An indication of just how tough it is for electric motorcycle startups is the recent demise of Alta Motorcycles who despite an impressive design and some racing success ceased production a few months back for lack of funding. The simple truth is that no OEM is making money on electric motorcycles at this point. Those that remain in business do so only by incurring huge losses waiting for the market to develop.
On a broader scale, the long-promised conversion to electric vehicles remains a hot button topic not only for motorcycles but also for every form of motorized transportation and recreation today. From automotive to marine, aviation to UTV, practically every OEM involved with motorized vehicle production, sales and distribution in business today is not debating “if” but “when.” Significantly reduced powertrain maintenance, low operation costs, reduced sound and emissions, fantastic power delivery and acceleration are all noted as ownership experience advantages promised by EV technology.
Butting heads with those real advantages are some genuine challenges as well. Premium retail price points, range anxiety, recharge time and charging infrastructure, battery development and lack of sound are all noted by motorcycle consumers as current barriers to entry. From a dealer’s perspective, it’s tough to know if and when the time is right to enter the market and add an electric vehicle line in the hopes of bolstering your bottom line.
Having spent six years in the trenches of the electric motorcycle business, talking to dealers and customers on a global basis, learning a lot about the technology, and more importantly, the kinds of riders attracted to the technology, I have some strong opinions. I also have some advice on whether or not the time is right for you as a dealer to get in the game. So, is it the right time?
Yes… and no! Based on what I’m seeing and hearing from the marketplace, it depends on the segment of the market you are considering entering, your dealership’s current status, customer base, location and last, but not least, your tolerance for market development and expectation for ROI. Under the right conditions, I would say we are getting closer by the day, and some dealers are already having real success selling electric motorcycles. However, the current market for electric motorcycles must be viewed from several different perspectives.
First, which segment of the market are you considering entering? Are we talking about full-size motorcycles? Scooters? Kids bikes? Where is your dealership located? Are you located in an urban or rural market? What are your expectations for ROI? Can you afford the floor space? Are you prepared to invest in training? Are you willing to offer demo rides? These are all separate topics that must be taken into consideration collectively to arrive at the best decision for your dealership.
Let’s start with the market for full-size electric motorcycles, which now almost ten years after I first joined Zero Motorcycles is still less than one half of 1 percent of the overall global motorcycle market. Aside from some very real, time-honored beliefs about what constitutes a “real” motorcycle in the minds of the riding public, the main challenge remains the value proposition, range and recharge times.
The bottom line is that there is a significant premium to be paid for a full-size electric motorcycle — currently, it can be as much as a 30-100% premium compared to a comparable ICE (Internal Combustion Engine) motorcycle. This remains the biggest challenge to widespread consumer adoption. Zero’s and Harley’s flagship model offerings range anywhere from $19,000 - $30,000, and at these retail levels cost significantly more than a comparable ICE bike.
Zero’s new SR/F model yields an advertised 161 miles of range in the city and 82 miles on the highway and retails for $18,995. Using the stock re-charge system, it takes 4.5 hours to re-charge to 95%. The Premium SR/F model with Optional Charge Tank at $20,995 MSRP can recharge in 2.5 hours using Level II charge systems. For anyone in the market for a motorcycle other than those looking strictly for a daily commuter or a bike to take on short weekend rides the advertised range and recharge specifications do not meet most customer’s expectations, at least their perceived needs.
The truth is that most daily rides fall within these ranges, and therefore, these products even at their current stage of development would be more than sufficient for 90% of the customer’s needs daily. However, most consumers don’t understand this, and it’s a tough sell when positioned against ICE products that have similar performance, much longer range and, more importantly, much shorter refuel profiles (after all it only takes a few minutes to refuel a gas tank) at much lower price points.
However, make no mistake you have to know how to sell electric motorcycles. The conversation with the consumer is much different from a traditional ICE customer. One issue I stress with every dealer considering adding an EV line to the dealership is that you must be willing to offer demo rides. The only way to sell EV products is to let the customer experience it for him or herself. The experience of riding an electric motorcycle is without question the most compelling sales tool you can use.
What about Kids EV products? What are the sales potential today? Where is that market headed? Here the value proposition works in favor of EVs. Because range requirements are much different from full size, electric-powered Kids bikes are already selling quite well. Osset is doing a tremendous job selling Kids Trials bikes, and some of the smaller European and Chinese companies are starting to offer similar products. The beauty of these is that they are great entry-level products, no gears or clutch to master and can be ridden literally in the backyard.
With retail prices ranging from $1299 and up, these are great products that not only offer real profit potential from a dealer’s perspective but perhaps a road map to a whole new customer base. Even more compelling, and the company making the most noise recently is STACYC (Stability Cycle) for kids 3-9 years old. Retailing for $699 and with 35 points built-in for the dealer, this company is on a real path forward to volume sales. STACYC has hit on a new product category and concept and built a product almost every kid will fall in love with. It could be a whole new product category driving new motorcyclists to our sport, hence its recent acquisition by Harley-Davidson.
As it is, electric motorcycles are currently appealing mainly to early adopters, engineers, riders with a technical background, members of academia and the environmentally-conscious crowd. As a result, the overall market potential for full-sized electric motorcycle sales is limited, and the primary reason why the majority of the OEMs haven’t jumped headlong into the market. The Japanese and most European manufacturers are waiting for the economics of battery costs and energy density to come more in line with consumer expectations. Some analysts suggest this will only take place when we have the next breakthrough in battery chemistry, and it’s in full production.
As a result, my advice to dealers considering entering the market now remains the same as it was eighteen months ago. Make sure you put yourself in the best position possible to be successful… and understand upfront what you are getting yourself into. Although volume is hard to come by, some dealers, especially in urban markets, are having real success selling electric motorcycles. Depending on ownerships’ level of interest and commitment it can be an excellent addition to their existing franchise lines.
I would tell any dealer interested in adding an electric motorcycle to the line to make sure they have a designated EV specialist on the sales team and invest in sales training. EV customers are very sophisticated, tech-oriented consumers. They are very knowledgeable about EV products and the underlying technology. The benefit to the dealership is the opportunity to attract a whole new customer base, perhaps. I’ve seen first-hand that electric motorcycles appeal to first time and, returning riders who want the latest and greatest in technology. It could be an opportunity to widen your consumer base.
In regards to electric scooter sales, here is another area with real potential but not how you might think. One of the things I learned from my experience with EVs and the scooter market, in particular, is just how different it is from the motorcycle market. Most scooter buyers are price sensitive. Since most scooters are purchased to meet a specific urban transportation need and appeal to a younger demographic, I would suggest that to be competitive electric scooters must be extremely priced competitive as well. Here is where battery costs come into play. The only scooter manufacturers are currently swimming at this end of the pond are some of the Asian manufacturers.
The other big challenge for electric scooters in an urban environment is where to charge the vehicle at night. Unless the scooter has a removable battery that can be taken inside to charge, this presents real challenges for widespread adoption. Electric scooters make the most sense in a shared economy or rental program such as the one created by Scoot in San Francisco.
Scoot is a very innovative company that has hundreds of their little red scooters deployed all over the streets of San Francisco. For a small annual membership fee and rental fee based on each use, you can have access to transportation almost anywhere in the city on command. Now I’m not suggesting that a dealer should try to set-up a similar rental program in their market, but if one is offered and my dealership is located in the city, I would make sure I at least had a pick-up and drop-off point located at my dealership.
Companies like Scoot are introducing new people to two-wheeled recreation and transportation daily. Since my interview 18 months ago, more and more scooter rental companies have emerged around the world. I would try to take advantage of that.
The bottom line is that EVs will play an increasingly important role in the future of our business. It’s just a question of timing. Once the leading OEMs start delivering a product to the market, it should be a good indication they believe the timing is getting very close. However, that doesn’t mean there isn’t opportunity right now.
One thing for sure is that electric motorcycles offer a great ride experience and, on that basis alone have real appeal. Just on performance alone, I’m bullish on their market potential over the long term, and I am incredibly bullish on the potential for Kids EVs today. My two-year-old grandson is already riding a STACYC and well on his way to his first mini-bike as a result. And, as you know, I’m for anything that helps us get the next generation of riders started!
AMA Motorcycle Hall of Famer Scot Harden has enjoyed a nearly 40-year career as one of the world’s top off-road racers and compiled a set of records that few can match. From 1971 until his final professional race in 2007 — at the age of 51 — Harden mastered a wide range of off-road disciplines. He also has compiled an impressive executive management resume within the motorcycle industry as a brand builder, race team manager, sales professional and product planner with such companies as Husqvarna, KTM, BMW, Zero Motorcycles and Best in the Desert. Harden also is owner of Harden Offroad, a business consulting practice. He was inducted into the AMA Motorcycle Hall of Fame in 2008.