Harley-Davidson (HOG) will rev up its push into electric motorcycles by building a research and development facility in Silicon Valley. The iconic motorbike firm's new R&D site will work on a variety of future products, including its first complete line of electric vehicles.
X"Recently we shared with the world our accelerated plans to build the next generation of Harley-Davidson riders globally," Harley-Davidson CEO Matt Levatich said in a news release. "This new R&D facility in the heart of Silicon Valley will help us deliver on those plans and demonstrate our commitment to lead the electrification of the sport."
Shares rose 2.7% to 44.06 on the stock market today. Harley-Davidson stock plunged from a 2018 high of 56.50 in late January. The stock has been hit by trade war fears, while President Donald Trump has encouraged a boycott over Harley-Davidson's plans to move some production overseas due to EU tariffs.
However, long before tariffs the company struggled with stretches of sales and profit declines. To arrest this problem the firm has established its "More Roads to Harley-Davidson" growth plan.
The firm's Silicon Valley facility, set to open in Q4, will serve as a satellite of its Willie G. Davidson Product Development Facility in Wisconsin. Initially it will focus on EV research and development, including batteries, power electronics and e-machine design, development and advanced manufacturing.
Harley-Davidson said it may consider expanding its focus to an increased range of advanced technologies across a broad spectrum of price points, power sources and riding styles.
The Milwaukee-based company revealed in July its plans for its first electric motorcycle in 2019 to woo new riders. The LiveWire bike will be the first in a planned lineup of no-clutch "twist and go" electric two-wheelers. Harley-Davidson aims to attract a new generation of bikers by offering additional models through 2022, including lighter and smaller offerings.
The manufacturer will continue to improve traditional heavyweight motorcycles, such as the Cruiser, and introduce a new modular 500cc-1250cc middleweight platform.
Harley expects to invest $675 million-$825 million on these initiatives through 2022, generating more than $1 billion of incremental annual revenue vs. 2017.
Founded in 1903, Harley's sales have been shrinking, with an aging customer base hurting prospects.
Harley-Davidson Overseas 'Americana'
According to Wedbush analyst James Hardiman, many people willing to buy motorcycles are opting for used ones.
"(Harleys) sell Americana, essentially," Hardiman said. Currently, Harley produces a small amount overseas, along with India and Brazil facilities that assemble bikes from U.S.-made components. But being the target of Trump's ire could hurt, he said.
"They have been big advocates of free trade," he continued. "But at the same time the last thing you want to do is get in a Twitter war with the president of the United States, whose support base clearly overlaps with their customer base."
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The post Harley-Davidson Taps Silicon Valley To Rev Up Electric Motorcycle Push appeared first on Investor's Business Daily.
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