Sept 27 (Reuters) – Harley-Davidson Inc (HOG.N) on Tuesday spun off its electrical motorbike division LiveWire in a SPAC deal creating the primary publicly traded electrical motorbike firm in the USA.
New shares of LiveWire Group Inc , Harley-Davidson’s former electrical motorbike subsidiary, had been down 6.2% in afternoon tradingafter surging 24% in early market buying and selling in its U.S. market debut on Tuesday following the unit’s $1.77 billion merger with a blank-check agency.
LiveWire has one EV bike mannequin priced starting at $16,999 and one other at $22,799, each hefty worth tags in an atmosphere of dampening shopper confidence as Individuals are nonetheless dealing with record-high inflation to cowl primary residing bills.
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“Individuals aren’t going to be shopping for these models in 2023 in the event that they’re dealing with 8% or 9% inflation. They’ll need to purchase groceries” mentioned Jaime Katz, a senior fairness analyst at Morningstar.
Final yr, the EV unit agreed to merge with particular objective acquisition firm (SPAC) AEA-Bridges Affect Corp (IMPX.N).
Shareholders for AEA-Bridges permitted the merger final week, whilst traders are rising extra cautious about blank-check firms with a report variety of SPACs liquidating in 2022 amid surging rates of interest and market volatility. The acquisition was initially anticipated to shut within the first half of the yr.
“I feel there was most likely a extra optimum time to do that – possibly there was one thing facilitating the precise execution that was kind of like now or by no means,” Katz mentioned.
At its traders day in Might, firm executives forecasted a models gross sales quantity of greater than 100,000 electrical bikes by 2026. Like different auto producers, the corporate has contended with provide chain woes affecting its means to maintain showroom flooring stocked throughout peak using season.
Harley Chief Govt Officer Jochen Zeitz mentioned in a CNBC interview that the world’s largest motorbike maker has secured provide for its electrical bikes for the “subsequent few years.”
Harley launched its first electrical bike, the LiveWire, in 2019 earlier than deciding to relaunch the bike as its personal sub-brand. Hoping to recoup misplaced market share as the corporate’s core child boomer buyer base grows older and curiosity in motorcycling as a leisure exercise fades, the Milwaukee-based firm is in search of to change into extra aggressive with different electrical motorbike producers.
Harley-Davidson will maintain the bulk possession of LiveWire, with a 74% stake.
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Reporting by Bianca Flowers in Chicago and Aishwarya Nair in Bengaluru; Modifying by Maju Samuel, Jonathan Oatis and Mark Porter
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