There’s a way to view the auto industry as a group of companies that got high on the profit margins provided by the pandemic, dumped too much money into EVs, and pissed off suppliers, dealers, and customers when the market snapped back to inflation. That’s also not at terrible way to view what happened at Harley-Davidson.
The Morning Dump is normally focused on the news from manufacturers of four-wheeled vehicles, but we (Mercedes) write about bikes frequently enough that it’s worth talking about what’s happening in Harley. There’s a new CEO and his game plan sounds not dissimilar from what a lot of younger automotive execs are trying execute.
Alpina, now wholly owned by BMW, is going in the opposite direction. Can that brand fill the space between normally-priced BMWs and Rolls-Royces? I wonder what Dr. Z thinks about it. Actually, Dr. Z is off focused on something else. Batteries! And while I’m talking about batteries, I think LFP is an under-discussed topic.
Can The Top Golf Guy Save Harley?
It always amuses me when I see press photos from Harley-Davidson, which seem to be dominated by young and attractive people on giant cruisers and touring bikes. Charitably, those are not the people you generally see riding Harleys.
The previous CEO of the company, Jochen Zeitz, was focused on high margin vehicles and squeezing what could be squeezed out of its biggest, most expensive bikes. As with Stellantis, this strategy works until it doesn’t, and sales nose-dived. Zeitz was replaced with a guy who couldn’t even ride a bike named Artie Starrs, who came over from Top Golf of all places.
Is that crazy? Sometimes you need an outsider, and a guy who made the geriatric sport of golf suddenly more interesting to young people is maybe not the worst choice. His plan is basically the inverse of what Zeitz did, as Starrs told The Wall Street Journal:
Starrs said Harley is going to bring back the Sportster, an entry-level bike the company stopped making in 2022 after concluding its air-cooled engine wouldn’t meet European environmental regulations.
The new model has conquered that issue, Starrs said, without offering specifics. The bike will sell for about $10,000, on par with the least expensive motorcycle Harley now makes, and have an 883 cubic-centimeter engine.
The bike will be available globally and will go on sale next year. Sportsters for the U.S. market will be made at the company’s York, Pa., factory, Starrs said.
“Our riders want it, which means our dealers want it, which is why we’re so passionate about bringing it back,” Starrs said.
Where, exactly, that bike will be built is an open question given tariffs.
As with car dealers, Harley dealers don’t exactly love being saddled with huge amounts of inventory. As part of its plan to retrench ahead of a new broader strategy, the company has been trying to shed bikes via heavy discounting, which has increased sales at the cost of profits, as Bloomberg reports:
Harley reported adjusted earnings of 22 cents per share, below the 35-cent average analyst estimate and down from $1.07 a year ago, the company said Tuesday in a statement. But global retail sales climbed 8% to 33,500 motorcycles, powered by a 14% increase in the key North American market, where sales of its heavyweight Touring bikes were strong.
“What we committed to we achieved and then some as it relates to rightsizing the inventory levels at dealerships,” Chief Executive Officer Artie Starrs said in a telephone interview. “It sets us up well as we chart the path forward.”
The forever challenge of motorcycles seems to be that the appeal is strongest amongst young people who have less money to spend, and much older people who have more money than time.
One of our most popular stories this week was about a Harley Sportster-like Chinese bike, so clearly some people care about bikes.
Alpina Is Going After AMG With Pricier Models
The BMW takeover of Alpina is complete, and the fruits of that acquisition are soon to be revealed. The once-independent BMW tuner has built some incredible cars, including one of the best three-row SUVs you’re gonna ever drive.
What’s the plan going forward? According to this Manager Magazin article, it’s profits:
The foundation for this will initially be BMW’s 7 Series sedan and the flagship X7 SUV. Both models will receive a lavish refinement – meaning they will be customized as individually as possible, for example with naturally tanned Lavalina leather and 20-spoke wheels. Alpina is to be positioned as BMW’s luxury brand. “This fills a gap in our portfolio,” says one of those involved.
Currently, BMW’s vehicle lineup already ranges from motorcycles and Mini Coopers to bestsellers like the 3 Series and up to handcrafted luxury cars. However, BMW strategists see room for expansion between the 7 Series, offered from €120,000, and the ultra-luxurious, custom-built models from its British subsidiary Rolls-Royce, which quickly exceed €350,000.
It’s probably worth mentioning that Mercedes tried this back in the Dieter Zetsche (Dr. Z) days with Maybach and it didn’t quite work. Mercedes retooled Maybach as just a more expensive Mercedes trim and that seems to be a more successful strategy, and maybe what Alpina is going to be used for.
Dr. Z Has A New Gig
I am old enough that then-DaimlerChrysler CEO Dieter Zetsche served me a beer at an abandoned firehouse in Detroit. If that sentence doesn’t make sense to you, it’s fine. The aughts were wild.
Since leaving Daimler, Zetsche hasn’t been in the news as much, but he’s apparently been working with startup solid-state battery company Factorial, and has now joined the board.
Factorial plans to go public by mid-2026 through a merger with Cartesian Growth Corp. III, a special purpose acquisition company (SPAC), that values the battery startup at $1.1 billion to $1.5 billion. The IPO “could be any moment now,” Factorial CEO Siyu Huang told Automotive News Europe.
Zetsche’s appointment comes as Factorial scales production of its SSB technology. Factorial partners with major automakers, including Mercedes and Stellantis. It also is working with California-based Karma Automotive, which will use Factorial’s SSBs in the Kaveya coupe that is set to go into production in late 2027.
Factorial says its batteries weigh less, charge faster and offer longer driving ranges than traditional lithium ion batteries.
A SPAC? That always goes well!
Europe Is Trying To Fix Its Battery Problem
Here’s a chart:
As you can see, Europe still gets a lot of its battery cells from places that are not Europe (China, mostly), and this is especially an issue when it comes to LFP batteries.
The whole European battery adventure has been a bit of a disaster. The continent’s automakers and governments put a lot of emphasis on one company, Northvolt, which absolutely fell apart. Outside of China, the EU represents the biggest and wealthiest market for EVs, and that gives officials there the opportunity to use sourcing requirements to kickstart more local development.
Specifically, the proposed Industrial Accelerator Act could help the continent recover from the Northvolt collapse, as S&P Global points out:
A quick look at the EU Industrial Accelerator Act proposals reveal striking parallels with mainland China’s historical playbook for the battery sector to achieve global dominance—particularly local content requirements, fast-track permitting for strategic projects and stringent FDI mandates. Whether these clauses will deliver comparable success for Europe or merely impose costly protectionism remains to be seen, given the region’s higher baseline costs and fragmented execution.
A bigger issue might be chemistry, though:
Currently, around 50% of the cells equipped in EVs manufactured in Europe are produced locally. The share is much lower for LFP/LMFP cells compared with the nickel-based ternary cells. With efforts to localize more of the battery supply chain, there is also a growing focus on building up cathode active material (CAM) capacity within the region. S&P Global Mobility forecasts that local production will overtake CAM imports in the region by 2027.
Lithium manganese iron phosphate (LMFP) cell production is also projected to experience a dramatic increase. This represents a significant shift, indicating a growing preference for LFP due to its cost-effectiveness and safety advantages. However, most CAM projects in Europe are for nickel cobalt manganese (NCM), and there have been only a few lithium iron phosphate (LFP) CAM projects announced so far.
I think you’re going to see a lot more LFP batteries, which are cheaper and safer, if not quite as quick-charging or energy dense. That’s what Ford is using for its UEV projects. The big test of the IAA, if implemented, is if we see more LFP projects.
What I’m Listening To While Writing TMD
What better way to celebrate Cinco de Mayo than with a Tex-Mex punk band from San Antonio. It’s Piñata Protest with “Aqui Nomas,” Hell yeah.
The Big Question
Two wheels bad or two wheels good?
Top photo: Harley-Davidson
So Harley is going to do a 180° back to Levatich’s strategy?
That’s how I read the news. I wonder how Levatich feels about that? Apparently, there’s a whole new “RIDE” initiative that Harley wants to launch for this. There’s only been a vague teaser video for now (hence why I didn’t cover it yet). I have to imagine we’ll get real details soon.
I think the failure of Livewire was Levatich’s albatross that got him canned not necessarily the new gas powered models..
IMHO, the Livewire was too early. The charging infrastructure isn’t well built out in rural areas, battery tech was too expensive, slow charging and not power dense enough. The result was a very expensive motorcycle with limited range. My usual Sunday ride was 190 miles and that would almost drain the tank on the NC700X I used to ride. I couldn’t do that on a Livewire without stopping to charge at least once. There are no reliable chargers on that route because of how rural it is.
The Livewire was aimed at the wrong market. EV tech is not there yet to replicate the weekend ride of a couple hundred miles. Electric motorcycles should be aimed at urban commuting. Small battery, short range, cheap and easy to use.
The Livewire was a fun bike to ride and proved to me that Harley can make a bike that handles if they want too.
Which was a part of Levatich’s initiative to change Harley-Davidson…
Most reporting I’ve read on the subject more or less points to the fact that Levatich’s plan wasn’t really paying off in the short term, which was made worse by the total bungling of the Livewire. I mean, More Roads had this grand idea of getting people into bikes, teaching them how to ride, and then selling them a Harley.
Yes, All Roads had a plan to create riders – in the USA – because the number of people riding in the USA is in decline. Their Rider Academy taught on small Harley’s was part of that plan and one that was kept. Then those newly minted riders come out of the Academy and the smallest and cheapest bike Harley has to offer is a 975cc Nightster. Harley still doesn’t understand that new and young riders need smaller and cheaper options.
I’d say a bigger piece of All Roads was growing Harley’s international sales so they were 50% of total sales. The goal for the USA was stability and to stop the decline. Levatich understood that to grow the company Harley needed to target countries were motorcycling and populations are growing. To do that he needed new products to fit those markets like the X350, X440, and X500. Then there were the Revolution models specifically targeted at Europe where riders don’t have a preconceived notion that all Harleys must be a cruiser with a 45 degree air cooled twin, low seat, and minimal rear suspension travel.
Zeitz threw all how of stability in the USA and growth in other markets away basically reducing focus to Harley’s core big twin models. I still think he was hoping to boost the financials in preparation for a private equity company to take Harley private – similar to what just happened with Indian.
I was just having an argument with a long time friend and riding buddy. His group of friends all rides Harley, while he is the only Harley rider in my circle of rider friends- and that’s not to say we are sport bike riders; touring and adv mostly. He kept saying that Harley needs to ‘get back to it’s roots!’ He could not be convinced that the roots were rotten, feeding on the retirees, and that the younger riders were looking at dirt/adv models with engines smaller than anything Harley offers.
*Shrug*
He’s the only under 40 person I know who rides a Harley.
But then again, I am only in my early 30s and ride a Goldwing.
Harley’s “roots’ are back when when they sold a full line of motorcycles from minibikes to tourers and competed in international racing – and actually won.
They also sold a Sportster that was sporty – at least for the time.
This is how corporate America works. One guy comes in and changes everything. Then the new guy comes in and changes it back. I’ve been with my employer for 26 years and 4 CEO’s. Every time a new CEO comes in, we flip flop back to a previous operating model.
That’s how the federal government works too.
Not just on the managerial level. Design is like this as well. It is fun watching the history of various car models and how they change over time. One year everything goes round – round lights, dials, surface details, then at the mid-cycle refresh, they change it up to all squares – square lights, dials, surface details. Then with the upcoming full redesign, they go back to round shapes again.
Higher education works in a similar way, but instead of CEOs it’s college presidents and EVPs. The EVPs especially like to leave their mark as their goal is to be a president at their next stop.
True, though sometimes it’s a matter of timing and the earlier plan was just premature for the business/product environment. That may be the case here. I just hope the new guy takes better care of their dealers because everything I’ve read says that they put unreasonable demands on them, including large real estate expenditures, and left them holding the bag- especially by cutting them out by pushing product online. Yes, selling online is SOP these days but they should’ve had the foresight to not put large demands on dealers before cutting them out by pushing online products directly to consumers. The online shift is especially bad for HD dealers because HD is similar to Ferrari in that they make more or at least a high percentage of their money off of branded and licensed merchandise- rather than just their vehicles. For every bike they sell, they likely sell 5-10 accessories (if not more) to go along with it, especially clothing.
BTW, there is gigantic HD dealership that you can see from 95 a little north of Richmond,VA that always has a giant empty parking lot when I’ve driven by it. If that location was pushed for by corporate and it is indicative of what the dealers are experiencing, things are bad with a capital B and they got screwed!
>BTW, there is gigantic HD dealership that you can see from 95 a little north of Richmond,VA that always has a giant empty parking lot when I’ve driven by it. If that location was pushed for by corporate and it is indicative of what the dealers are experiencing, things are bad with a capital B and they got screwed!
That area also had a decades-old sporting goods store called Green Top. Gander Mountain built a giant store just south of it. Fast-forward 2 years and Gander Mountain was out of business and Green Top, which was in a mismash of old buildings, moved into the Gander Mountain store and they are thriving there.
Indeed, Green Top is hands-down my favorite outdoor sporting goods nationally and I always go there when I’m in the area! Thanks for the recommendation anyway. They have an extremely knowledgeable staff that has been there forever and it’s still privately held. The thing I love about it is their product lines vary from mainstream(Carhartt) all the way up to Sims, Filson(including bags), and they may still have Barbour. Those are typically split into different stores in the South. If you like double guns, they always a good selection of older SxSs and O/Us, including LC, Parker, and even the occasional 9-pin or British side-lock(H&H, Purdey). BTW, they also have one of the best action mounts I’ve ever seen that is a suspended alligator chasing a beaver. I think it’s hidden in the Conf room now.
Maybe. Just bring back the ancient 883 is not / was not Levatich’s plant. He added the X350, X440, X500, and planned for a whole family of Revolution models in new market segments.
I was more oversimplifying Levatich’s “More Roads” strategy, in that he sought to grow the customer base by offering more models, a lot of which were entry level and/or more affordable. Zeitz conversely was a 180° to this, in that he brought HD back to their core customer and was willing to sacrifice volume for margins.
The X bikes weren’t bad ideas, but they were poorly executed. The only real unique Revolution (I’m implying the PA) we got has pretty dang good execution, but Zeitz has let it wither.
Heck, I’d even say the LiveWire was a good execution, but probably a bad idea. But we know this because of hindsight, and looking back 10 years ago, people were iffy about it, but electric motorcycles seemed a lot more promising.
How are the current X350 and X500 poorly executed? They seem to be well received in the markets they are sold.
Why get an X500 when you can get the same exact bike as a Benelli Leoncino 500 for less. That’s why.
Part of the reason why bikes like the Triumph’s 400s are so well received, is because they aren’t just rebadged Chinese or Indian offerings.
The average customer doesn’t know that Benelli and Leoncino exist. Even if they did some are willing to pay for for styling, brand, and dealer access.
All of the European bikes made in India have a Indian JV version
There aren’t direct copies but they are highly related just like the KTM / CFMoto bikes coming out of China.
Same thing happens in China
Where the X500 is sold, a lot of them do. Maybe not in the US, but elsewhere where it’s easy to get loads of Chinese and Indian bikes, they are certainly aware of Chinese and Indian offerings.
None of your comparisons are anything like the HD/Benelli badge engineering. It’s like saying the Saab 9000 and Lancia Thema was the same situation as the GM J-Body based Cavalier/Cimarron/Firenza…
We (at least I) was talking about what Harley needs in the USA to diversify their lineup and bring in some new riders.
Looking at Asian markets, yes, customers know about Chinese brands but that doesn’t mean the Harley doesn’t sell. They sell even at a 40% markup over the Benelli. If Harley wanted to sell more they could drop the price – maybe a 10- 15% premium for that Harley look.
The Benelli and Harley share the chassis and engine. The bodywork is completely different.
I concur that they need to expand and offer smaller less expensive bikes. That doesn’t mean they can’t be cool looking as well. Royal Enfield has been doing well with that biz model for years and Honda has continued to sell plenty of the smaller HD knock-off Rebels here, and have been doing it for decades.
While I personally would like to see Harley bring a standard like the X500 to the USA I think something a bit more retro like the Royal Enfield Bullet 350 would sell better.
Unfortunately it looks like the USA is getting the X440 that is sold in India. Air cooled, single cylinder, 27 hp, 430 pounds. It is basically a motorcycle designed to fail in the USA.
I’m with you 100%, it can’t just be any smaller engine. It needs to be modern, perform well, or even fight above it’s weight. The Britain of my youth always had fantastic looking smaller displacement bikes that often punched above their weight; though they were mostly sport bikes. I actually saw a mint 80s Kenny Roberts 350 in Nashville a few years ago and felt like I was 15 in Britain again.
HD could even make cool Bubba Shubert dirt track-inspired scramblers that have a Road Warrior-looking version. Use the old track highlights in the ads and commercials to establish pedigree and end with the new retro-inspired models. If they could get PP in the next Road Warrior movie(I’m hope they’re coming) and pay Charlize, Tom, or Anya to do a commercial, that would definitely change the script and move product.to new demos.
I can see the 883 coming back as a gap filler.
It is mostly sorted after around 70 years.
The Euro5 emissions were just an excuse.
The Motor Company will have to sharpen it’s sword to fit in between Japan, China and maybe India, they have to realize that a 900lb cruiser/tourer isn’t every motorcyclist’s dream.
To me the Revolution models could be there, but they have to get rid of the “Marx Sound of Power” plastic detailing and some stupid design choices.
The adjustable ride height option will win riders if spread across the range, they Own that lead.
I don’t know that I see a reason to do any of this. the Nightster is already a buck under 10K, for a 900. the motor actually finally provides sporty power, though an Indian FTR is still better, so Why not plop some chrome on it and call it a sportster if that name matters in some way.
https://www.harley-davidson.com/us/en/motorcycles/nightster.html
That’s the thing that has me scratching my head about a low-buck Sportster revival. Harley already has a $10k bike. I’d get it if Harley said it wants to make a new bike that’s not much more than the price of a Royal Enfield 650.
There were talks of a Baby Harley from India. 338R or X350, or I think even a shrunken FXR or something. they all went away after the 750 and 500 street bikes flopped in the US. I think they are interesting and I could certainly see the benefit of a 300CC bike with say a decent CVT for beginner riders. But it would have to be under the Grohm as far as pricing and have a huge warranty to avoid quality concerns.
The Nightster needs a higher seat and 5 inches of suspension travel. The Scout and Sportster have the same problem so bringing back the 833 isn’t going to help.
I would certainly rather have the XR1200 and XR883 come back personally, but the thing about Sporty’s is they have been id’d as bike for Females by a bunch of riders. and so the low seat height is in relation to the targeted rider at this point.
I always though the Yamaha 650 Star cruiser was kind of perfect as it was more of a 3/4 scale soft tail in design and very easy to ride regardless of inseam. but many just shunned them too. Bikes are toys for the majority in the US and thus it is difficult to really tell where the desires will go one day to the next.
There is low seat height and then there is Harley low. Plenty of women and shorter men ride standard and sport bikes.
Personally I would like to see Harley offer an optional higher tractor seat like their bikes used to have in the 50’s with a lot of space under it.
https://ogden_images.s3.amazonaws.com/www.motorcycleclassics.com/images/2022/04/29162036/1956-Harley-FL-1100×822.jpg
The problem (for me at least) with the XR1200 and XR883 was the engine. It is simply antiquated and was in need of an update. Harley has done that now with the Revolution engine and I see no reason to take a step back.
A 975cc standard like the XR1200 would be the Bronx. A bike that we were going to get before the last CEO killed it.
they made them. in 2024, part of the icons collection, the Highway King was pretty interesting, though it kind of ruined the barcolounger set up for the passenger, so I feel like this was never a comeback type bike as much as a low volume oddity that used a few select accessories that were made to bolt on in place of standard stuff. https://www.harley-davidson.com/ctfasset/5vy1mse9fkav/5xKlHnpGpZfM7e0d8y4KmL/c9f0331e02e004c3584160232137284d/eghk-mc?impolicy=myresize&rw=960
Yes, and the Police bikes have the high tractor seat too.
I was specifically thinking of a Nightster with a high tractor seat that takes the seat height from 27in to a normal 32 inches. A modern bike, with some subtle retro touches, that make 95 hp and weighs less than 500 lbs.
Two wheels ALWAYS good, more often than not, better than four!!!