Electric vehicles have continued to remain as popular as ever among investors, especially as most companies in the automobile industry have started shifting towards EV development and production. This even includes motorcycle companies, like Harley-Davidson (NYSE: HOG), which has been working on an electric motorcycle for quite some time now. The company now announced that it plans to take this EV business and let it go public.
Most EV-related IPOs have done incredibly well. Although there are more EV companies than ever before, that hasn’t necessarily saturated the market. On the one hand, there are few companies working on electric motorcycles as opposed to more traditional EVs.
Additionally, 2021 has already been a record-breaking year for IPOs, so investors are betting that Harley-Davidson’s new spinoff will fare well regardless. Especially considering the Amazon-backed EV start-up, Rivian, broke a $100 billion market cap shortly after going public.
On that topic, Harley-Davidson clarified that its EV business, called LifeWire, wouldn’t be pursuing a traditional IPO, but would instead go public through a special purpose acquisition company (SPAC). The idea that Harley would even be going down the EV route has been a wake-up call to industry analysts. At this point, it’s all but certain that EV’s are going to be the next big thing for the automobile industry, and all of Wall Street agrees.
“If anything this underlines what we’ve been saying for a long time. Detroit, wake up! The train has left the station! EVs are inevitable,” said Roth Capital analyst Craig Irwin. “Many traditional OEMs (Original equipment manufacturers) with emerging EV businesses can obviously do similar spinoff transactions.”
Shares of Harley were up over 11.5% in response to the news. Despite today’s jump, the company has largely underperformed the market. Shares are up only 6.6% since the start of 2021, compared to the NYSE, which is up around 15.5% over the same period. Most analysts are neutral on the stock, while a smaller number are bullish on Harley-Davidson’s future. As the company’s customer base continues to get older and die out, Harley has had to shift to younger demographics if it hopes to stay in business.
While Harley-Davidson’s EV announcement hogged most of the limelight, there was other news in the industry worth mentioning. Japanese giant Toyota announced that it would be accelerating its own EV program. The company plans to sell more than 3.5 million EVs by 2030 while transitioning its Lexus brand into being 100% EV by that same time.
While these types of targets might seem overly ambitious, what is undeniable is that the EV market is growing at a seemingly unstoppable pace. Here in the U.S., recently passed infrastructure and sustainability funding from the Biden administration is only further bolstering the growing EV industry.
Harley-Davidson Company Profile
Harley-Davidson is a global leading manufacturer of heavyweight motorcycles, merchandise, parts, and accessories. It sells custom, cruiser, and touring motorcycles and offers a complete line of Harley-Davidson motorcycle parts, accessories, riding gear, and apparel, as well as merchandise. Harley-Davidson Financial Services provides wholesale financing to dealers and retail financing and insurance brokerage services to customers. Harley has historically captured about half of all heavyweight domestic retail motorcycle registrations. We expect the firm will expand into middleweight markets in 2021. – Warrior Trading News
