Harley-Davidson’s EV Gambit: Can LiveWire Steer the Motorcycle Giant Toward Revival?

In an era where electric vehicles (EVs) dominate headlines and combustion engines face existential threats, Harley-Davidson (HOG) stands at a pivotal crossroads. The iconic motorcycle brand’s Q1 2025 financial results reveal both stark challenges and flickers of hope. While its traditional motorcycle sales plummeted 21% year-over-year, its EV division, LiveWire, is executing a disciplined pivot—one that could redefine Harley’s legacy. Yet, tariffs, leadership transitions, and market skepticism loom large. Is this a buying opportunity in a stock trading at near book value, or a risky bet on a fading icon?

LiveWire’s Struggle and Strategic Shift

LiveWire’s Q1 performance was a mixed bag. Unit sales of electric motorcycles fell 72% to just 33 units, with revenue collapsing 66% to $0.4 million. However, its operating loss narrowed by 32% to $20.7 million, thanks to aggressive cost-cutting. CEO Karim Donnez’s focus on trimming expenses—30% lower selling and administrative costs—has stabilized the segment’s finances, even as sales sputter.

The strategy now hinges on geographic expansion and product diversification. LiveWire entered four new European markets (Poland, Portugal, Finland, Belgium) and launched the premium S2 Alpinista globally, alongside its first pedal-assist STACYC product for teens and adults. These moves signal a push into broader consumer segments and institutional markets, such as the company’s first fleet sale to Florida’s St. Cloud Police Department.

Yet, the risks are clear. LiveWire’s dependency on Harley’s financial health is stark: as the parent company’s revenue fell 23% to $1.33 billion, Harley’s ability to fund LiveWire’s growth is constrained. Moreover, EV market adoption remains sluggish, with supply chain bottlenecks and tariff costs ($130–$175 million in 2025) threatening margins.

Leadership and Strategic Uncertainty

While LiveWire’s leadership remains intact—Donnez and CFO Jonathan Roop are steering cost discipline—the broader Harley-Davidson board faces turbulence. The company’s CEO search, ongoing as of May 2025, adds to investor anxiety. A prolonged leadership vacuum could stall critical decisions on tariffs, supply chains, and LiveWire’s autonomy.

Meanwhile, institutional ownership at 97% hints at Wall Street’s patience, but proxy disputes with advisory firms like ISS reflect underlying governance concerns. The absence of a full-year financial outlook underscores the macroeconomic fog: high interest rates, China’s weak demand, and geopolitical risks cloud Harley’s path forward.

Tariffs: The Elephant in the Boardroom

Tariffs are Harley’s albatross. The company withdrew its 2025 guidance, citing “uncertain global tariff situations.” Chinese tariffs alone could drain $130–$175 million this year, exacerbating a 28% sales slump in Asia Pacific. Harley’s cost productivity initiatives—$24 million in savings—are a start, but tariffs threaten to offset gains in every segment.

Valuation: A Discounted Bet on the Future?

Harley’s current valuation presents a paradox. Its P/E of 9.14 and EV/EBITDA of 10.2 suggest undervaluation relative to earnings, while its P/B ratio of 1.0041 implies trading near book value. Analysts offer a lukewarm consensus: a “Hold” rating with a $29.02 average price target, suggesting a 7% upside from $27.06.

Yet, risks are priced in. GuruFocus’s $21.92 “intrinsic value” estimate warns of overvaluation, while the PEG ratio of 2.72 hints at stretched growth expectations. For bulls, this is a contrarian play: Harley’s $1.9 billion cash pile and LiveWire’s strategic moves could unlock value if tariffs ease and EV demand surges.

The Case for Immediate Investment

Harley-Davidson’s stock is a test of faith in its EV transition and brand resilience. While short-term headwinds—tariffs, weak motorcycle sales, leadership uncertainty—are formidable, the company’s valuation offers a margin of safety. LiveWire’s cost discipline, geographic expansion, and premium product launches position it to capitalize on EV adoption once macro conditions stabilize.

The $27 stock price reflects skepticism, not reality. For investors with a multi-year horizon, Harley’s undervalued multiples and untapped EV potential make it a compelling contrarian bet. The question isn’t whether Harley can survive—it’s whether it can dominate the next era of mobility.

Action Items:
- Buy Harley-Davidson stock at $27.06, targeting $32.00 (high analyst estimate).
- Monitor tariff negotiations and LiveWire’s Q2 sales trends.
- Avoid if macroeconomic risks worsen or leadership remains unresolved.

Harley-Davidson isn’t just a motorcycle maker—it’s a symbol of American grit. Its EV pivot, while rocky, may yet redefine that legacy. The stock’s valuation offers a rare chance to bet on a comeback story.