The Harley-Davidson ebike is here, just don’t call it a Harley

Oct 27, 2020, 3:39 PM

Harley-Davidson is starting an ebike company that it hopes could help it connect with a younger audience and grow its business. Credit: Serial 1 (CNN)

(CNN)

BY MATT MCFARLAND, CNN BUSINESS

KSLNewsRadio

(CNN) — Harley-Davidson, an aging brand that has faced shrinking sales over the past year, is starting an ebike company that it hopes could help it connect with a younger audience and grow its business.

Serial 1, the new Harley-Davidson venture, revealed the first glimpse Tuesday of its electric bicycle, which it says will be for sale in the first half of 2021. Harley-Davidson originally showed off photos of a concept electric bicycle in January 2019, but the company will be a minority shareholder in Serial 1, and venture capitalists will own the majority of the new brand, though Serial 1 declined to reveal the investors.

Harley-Davidson has also launched an electric motorcycle, Livewire, to help reach new customers, but will keep that full-fledged motorcycle under the Harley name.

The struggle

This summer, Harley-Davidson announced plans to lay off approximately 700 people. The cutbacks came as Harley’s sales bottomed out in the pandemic, with second-quarter revenues falling 47% compared to the same period a year before.

Harley had already been struggling before the pandemic, with profits falling the last six years, according to its annual reports. (Harley-Davidson announced Tuesday that its profits rose 39% in the past three months when compared to last year, though its revenue in the same period fell 8%.)

Serial 1 is led by former Harley-Davidson employees, including Serial 1 president Jason Huntsman, who worked at Harley since 2013, including as the company’s director of its internal eBicycle development effort.

Harley-Davidson ebike comes to Salt Lake City

Serial 1 will have two headquarters. Engineering will be based in Milwaukee, in a Harley-Davidson building. Serial 1 is also opening an office in Salt Lake City Utah, which Serial 1 brand manager Aaron Frank said was selected as a center for the outdoor industry and e-commerce. Serial 1 expects to sell many of its bicycles direct to consumers. Online bike sales have become common with leading electric bike brands such as VanMoof and Rad Power Bikes.

Frank, Serial 1’s brand manager, told CNN Business that the company is motivated to get the bikes to market quickly given bicycles’ popularity during the pandemic. Bike shops have struggled to keep up with demand, as people look for outdoor activities that make social distancing easy. Bicycles have also proven an appealing commuting option as some people avoid buses and trains.

“It’s a perfect storm of circumstances that make e-bicycles really a great solution for the moment,” Frank said.

Frank said that the new brand is being created because electric bicycles are a different product that’s intended for a different audience than Harley’s bread and butter, gas-powered motorcycles.

The name is derived from “Serial Number One,” the nickname for Harley’s first motorcycle, which was built in the early 1900s and is the oldest known Harley-Davidson motorcycle in existence.

Serial 1 has released few details about the bicycle, such as its cost. Frank did reveal a couple of features, that it will rely on a mid-mounted motor and have a belt drive rather than a chain. That set-up is used by some ebike makers, but isn’t universal, given the tradeoffs, such as higher costs and longer repair times.

Serial 1 aims to keep its ebike designs simple and not blur the line with mopeds. Its ebikes won’t have a throttle but will use pedal-assist technology. The motor will engage when a rider pedals and the ebikes will be limited to either 20 or 28 mph, due to ebike regulations.