Harley-Davidson stock soars 30% this week, company recommits to electric motorcycles

It’s no secret that Harley-Davidson has been in a tough financial spot for the last few years. And the figures from Harley-Davidson’s first-quarter earning’s call indicate that the COVID-19 pandemic hasn’t made the picture any rosier.

But after H-D’s acting CEO Jochen Zeitz laid out the company’s cash preservation plan and profitability strategy to deal with the effects of the global financial downturn, which included reaffirming the company’s commitment to electric motorcycles, the company’s stock price has been on a tear.

In fact, H-D stock is up approximately 30% since the beginning of this week. And that’d despite the continued drop in Q1 sales figures revealed yesterday.

Harley-Davidson’s retail motorcycle sales were down 15.5% in the US compared to Q1 2019. Globally, that number was 17.7%.

Total revenue was similarly low, dropping 8% from $1,195,637,000 in Q1 2019 to $1,099,788,000 in Q1 2020.

The company shipped 52,973 motorcycles to dealers in Q1 2020, down 10% year over year.

But after H-D’s former CEO Matt Levatich stepped down in February, acting CEO Jochen Zeitz is laying out the company’s new plan to manage its cash and increase profitability.

The company is currently sitting on $2.47B in liquidity including $1.47B in cash and is in discussions with major U.S. banks to secure an additional $1.30 billion in liquidity.

Part of the plan Zeitz detailed included reducing the company’s dividend payout by 95% to just $0.02 per share and halting stock buybacks.

Zeitz also explained that Harley-Davidson would be focusing more on US-based motorcycle sales to shore up its domestic market, and listed three categories on which the company planned to place a particular emphasis: Adventure Touring, Streetfighter and advancing electric motorcycles.

Here at Electrek, we’ve paid particular attention to Harley-Davidson’s innovation in the field of electric motorcycles. While electric-only motorcycle companies such as Zero Motorcycles have led the electric motorcycle industry for years, Harley-Davidson is perhaps the most successful legacy motorcycle manufacturer to field an electric motorcycle – though it doesn’t yet have much competition from other traditionally gas-powered motorcycle manufacturers.

H-D began its electric motorcycle development program back in 2014 with Project LiveWire, ultimately releasing the production LiveWire electric motorcycle in 2019.

Despite early criticism for its lofty $29,799 price, the LiveWire has won praise for its performance, handling, comfort, and build quality.

We took one of the first-ever test rides on a production LiveWire at the Brooklyn Formula E race track last summer, and then performed an in-depth review of the LiveWire last month.

Two H-D LiveWire motorcycles completed a more than 9,000 mile (14,480 km) journey from South America to California, and another LiveWire recently traveled 1,000 miles (1,600 km) in under 24 hours.

Check out our video review of the Harley-Davidson LiveWire electric motorcycle above

While the LiveWire isn’t expected to sell in large numbers, H-D has been upfront about the bike’s goal as a halo product designed to showcase the manufacturer’s electric motorcycle technology. The LiveWire isn’t intended to drive large profits, and instead Harley-Davidson has announced at least four other electric motorcycles and e-bike models that have been slated for release by 2022.

We’ve seen two of these as prototypes being tested in the wild, including a Harley-Davidson electric dirt bike and a Harley-Davidson seated electric scooter reminiscent of 1980’s minibikes. A lighter electric motorcycle with a distinctly flat tracker design is also in the works.

Concept art of an upcoming Harley-Davidson electric motorcycle

Harley-Davidson also has three electric bicycle models that were originally slated for release sometime this year, though we haven’t been able to confirm if that timeline has been delayed by the COVID-19 pandemic. Other electric motorcycle manufacturers have seen delays related to the pandemic, and Harley-Davidson has been affected by factory closures during government-mandated lockdowns.

Despite H-D’s current financials not painting the rosiest of pictures as well as the world teetering on the edge of a potential recession, investors have apparently been impressed with Harley-Davidson’s plan for the future. Now only time will tell if H-D’s stock rally seen over the past few days can maintain its momentum and help turn things around in Milwaukee.

What do you think is in store for Harley-Davidson? Will its commitment to electric motorcycles be the company’s saving grace? Sound off in the comment section below!