Harley-Davidson Inc HOG-N on Tuesday spun off its electric motorcycle division, LiveWire, in a SPAC deal creating the first publicly traded electric motorcycle company in the United States.
New shares of LiveWire Group Inc, Harley-Davidson’s former electric motorcycle subsidiary, were down 1.3 per cent in afternoon trading after making its U.S. market debut on Tuesday following the unit’s $1.77-billion merger with a blank-check firm.
Last year, the EV unit agreed to merge with special purpose acquisition company (SPAC) AEA-Bridges Impact Corp.
Shareholders for AEA-Bridges approved the merger last week, even as investors are growing more cautious about blank-check companies with a record number of SPACs liquidating in 2022 amid surging interest rates and market volatility. The acquisition was originally expected to close in the first half of the year.
“I think there was probably a more optimal time to do this,” said Jaime Katz, a senior equity analyst at Morningstar. “Maybe there was something facilitating the actual execution that was sort of like now or never.”
At its investors day in May, company executives forecasted a units sales volume of more than 100,000 electric bikes by 2026. Like other auto manufacturers, the company has contended with supply chain woes, affecting its ability to keep showroom floors stocked during peak riding season.
Harley’s chief executive, Jochen Zeitz, said in a CNBC interview that the world’s largest motorcycle maker has secured supply for its electric bikes for the “next few years.”
Harley released its first electric motorbike, the LiveWire, in 2019 before deciding to relaunch the bike as its own sub-brand. Hoping to recoup lost market share as the company’s core baby boomer customer base grows older and interest in motorcycling as a recreational activity fades, the Milwaukee-based company is seeking to become more competitive with other electric motorcycle manufacturers. LiveWire has one EV bike model priced beginning at $16,999 and another at $22,799. Harley-Davidson will hold the majority ownership of LiveWire with a 74 per cent stake.