MILWAUKEE - LiveWire, known for its electric motorcycles, and KYMCO, a leader in powersports, have announced an expansion of their strategic partnership to develop LiveWire's first electric maxi-scooter, targeting the European market. The two companies plan to combine their expertise, with LiveWire providing its S2 powertrain technology and KYMCO contributing its extensive experience in scooter innovation.
The maxi-scooter, expected to launch in the first half of 2026, is designed to offer a convenient and efficient electric riding experience suitable for urban commuting and adventure. This collaboration builds upon the existing relationship between the two companies, which began in 2022 when KYMCO invested in LiveWire.
Karim Donnez, CEO of LiveWire, expressed excitement about the partnership, stating that KYMCO's expertise has turned the idea of creating a class-leading maxi-scooter into a reality. KYMCO's Chairman, Allen Ko, echoed this sentiment, highlighting the opportunity to work with LiveWire on developing a new S2-based electric maxi-scooter.
KYMCO brings a wealth of knowledge to the table, with a history of producing premium internal combustion engine (ICE (NYSE:ICE)) scooters and experience in electric vehicles (EVs), including innovations like the RevoNEX electric street bike and the Ionex swappable battery solution.
The partnership aims to extend LiveWire's S2 product line into the maxi-scooter segment, combining performance and range with a new design tailored to the electric scooter market. While the scooter is primarily intended for European customers, it is planned to be distributed globally.
LiveWire, a brand with strong ties to Harley-Davidson (NYSE:HOG), focuses on leading the transformation of motorcycling through electric technology. KYMCO, with over 60 years in the industry, continues to push the boundaries of performance and sustainability in powersports.
This new development in the electric mobility sector represents a significant step for both companies as they leverage their combined strengths to innovate and meet the growing demand for electric transportation solutions. The information for this article is based on a press release statement.
In other recent news, Harley-Davidson has reported a downturn in its Q3 2024 earnings call, attributing the decline to a challenging market environment. The company experienced a 13% drop in global retail sales of new motorcycles, with a significant 26% decrease in consolidated revenue. Despite these challenges, Harley-Davidson's financial services (HDFS) saw a 10% increase in revenue. The company has revised its full-year outlook due to these recent developments.
Harley-Davidson's electric vehicle division, LiveWire, also adjusted its yearly unit expectations to 600-1,000 motorcycles in response to market difficulties. The company's operating income fell by 49% to $106 million, and earnings per share were down 34% to $0.91.
In light of these results, the company anticipates a decrease in dealer inventory by 20% by the end of 2024 and a decline in HDMC revenue of 14% to 16%. Despite these challenges, Harley-Davidson maintains its commitment to long-term strategies, including a focus on cost productivity measures and electrification.
InvestingPro Insights
As LiveWire (LVWR) embarks on this exciting partnership with KYMCO to develop an electric maxi-scooter, investors should consider some key financial aspects of the company. According to InvestingPro data, LiveWire's market capitalization stands at $1.18 billion, reflecting its position in the electric motorcycle market.
Despite the promising collaboration, LiveWire faces some financial challenges. An InvestingPro Tip indicates that the company suffers from weak gross profit margins, which is corroborated by the data showing a negative gross profit margin of -40.75% for the last twelve months as of Q3 2023. This suggests that LiveWire may need to focus on improving its cost structure as it develops new products.
Another InvestingPro Tip reveals that analysts do not anticipate the company to be profitable this year. This aligns with the reported operating income margin of -383.9% and the negative EBITDA of -$108.11 million for the same period. These figures underscore the importance of the KYMCO partnership in potentially improving LiveWire's financial performance through new product development and market expansion.
On a positive note, LiveWire holds more cash than debt on its balance sheet, which could provide some financial flexibility as it invests in the new maxi-scooter project. This strong liquidity position may be crucial for funding the research and development required for the planned 2026 launch.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. In fact, there are 8 more InvestingPro Tips available for LiveWire, which could provide valuable context for understanding the company's financial position and future prospects as it ventures into the electric scooter market.
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