Is LiveWire Group (LVWR) a Buy Now Despite Its Recent 7.56% Decline?

The electric vehicle (EV) sector has been a rollercoaster for investors in 2025, with macroeconomic headwinds, supply chain bottlenecks, and shifting consumer preferences creating a volatile landscape. LiveWire Group (LVWR), a key player in the niche electric motorcycle market, has faced its share of turbulence. Following its Q2 2025 earnings report on July 30, the stock plummeted 7.56%, raising questions about its long-term viability. But is this decline a buying opportunity, or a warning sign? Let's dissect the company's post-earnings performance, cost-cutting strategies, and niche market potential to determine whether LVWR deserves a spot in your portfolio.

Post-Earnings Performance: A Mixed Bag

LiveWire's Q2 2025 results revealed a 9% year-over-year revenue decline to $5.9 million, driven by a 65% drop in electric motorcycle revenue. This was attributed to a challenging EV market and supply chain disruptions, with unit sales falling from 158 to 55. However, the STACYC segment—focused on electric balance bikes for children and electric bikes—showed resilience, growing revenue by 25% year-over-year.

Despite the revenue contraction, the company reduced its operating loss by 35% to $18.3 million, a direct result of aggressive cost-cutting. Selling, administrative, and engineering expenses were trimmed by $7.6 million, reflecting a disciplined approach to managing cash flow. Additionally, LiveWire slashed net cash used in the first half of 2025 by 36% compared to 2024, signaling improved financial discipline.

The stock's 7.56% post-earnings drop, however, reflects investor skepticism. While the company highlighted strategic moves like entering Norway and showcasing lower-priced prototypes, the absence of unit sales guidance for the remainder of 2025 left many questions unanswered. The market's reaction underscores a broader concern: Can LiveWire sustain its cost reductions while navigating a fragmented EV sector?

Cost-Cutting Effectiveness: A Double-Edged Sword

LiveWire's cost-cutting initiatives are arguably its most compelling strength. By reducing headcount and streamlining operations, the company has narrowed its operating loss significantly. The $7.6 million reduction in expenses is a testament to its ability to adapt in a high-pressure environment. However, aggressive cost-cutting can also erode innovation and customer experience, particularly in a sector where product differentiation is critical.

The company's focus on AI and technology to drive efficiency is a positive sign, but it remains to be seen whether these tools can offset the loss of human capital. For example, the development of a small-displacement electric motorcycle priced below $6,000—a strategic pivot to attract price-sensitive consumers—requires sustained R&D investment. If cost-cutting comes at the expense of product quality or innovation, LiveWire could lose its edge in a competitive market.

Niche Market Potential: A Silver Lining

LiveWire's niche positioning as the #1 electric motorcycle retailer in the U.S. for 50+ horsepower on-road EVs is a unique advantage. While the broader EV market struggles with oversaturation and regulatory hurdles, niche segments like electric motorcycles remain underserved. The company's recent expansion into Norway and Europe, coupled with its STACYC segment's growth, highlights its ability to diversify revenue streams.

The STACYC segment's 25% revenue increase is particularly noteworthy. By catering to a younger demographic with electric balance bikes, LiveWire is building a brand that could translate into long-term customer loyalty. This “growing up with the brand” strategy mirrors Apple's approach to capturing early adopters, albeit in a smaller market.

However, the electric motorcycle segment itself is fraught with challenges. With unit sales down 65% year-over-year, LiveWire must prove it can scale production and distribution without compromising margins. The recent prototype models unveiled at the Harley-Davidson Homecoming event suggest optimism, but investors should wait for concrete data on consumer adoption before committing.

Risks and Considerations

The EV sector's struggles are well-documented. Tesla's recent stock volatility and the bankruptcy of several EV startups highlight the sector's fragility. LiveWire's decision to withhold unit sales guidance—a rare move—further complicates its investment thesis. While this flexibility allows the company to respond to market shifts, it also erodes investor confidence.

Moreover, LiveWire's revised operating loss guidance of $59–$69 million for 2025, driven by ongoing negotiations with Harley-Davidson, signals continued uncertainty. The company's reliance on a single strategic partner for product development and distribution is a risk, particularly if the joint venture encounters delays or disputes.

Investment Thesis: A Speculative Buy with Caveats

LiveWire Group's 7.56% decline post-earnings may present an entry point for risk-tolerant investors who believe in the long-term potential of the EV niche. The company's cost-cutting measures, STACYC segment growth, and strategic expansion into Europe are positives. However, the electric motorcycle segment's struggles and lack of clear guidance make this a speculative bet rather than a core holding.

For investors to justify a purchase, LiveWire must demonstrate:
1. Sustainable cost reductions without sacrificing innovation.
2. Successful scaling of the STACYC segment to offset electric motorcycle losses.
3. Clear product launches from its prototype models, particularly the $6,000 electric motorcycle.

In the short term, the stock's volatility and macroeconomic headwinds will likely persist. But for those with a 3–5 year horizon and a tolerance for risk, LiveWire's niche leadership and strategic agility could pay off if the EV market stabilizes.

Final Verdict

LiveWire Group is not a guaranteed buy, but it's a compelling case study in resilience within a struggling sector. The recent decline reflects market skepticism, but the company's operational improvements and niche positioning offer a path to recovery. Investors should monitor its Q3 results, particularly the performance of its new product lines and the resolution of its joint venture with Harley-Davidson. For now, a cautious “buy” is warranted for those who can stomach the volatility and believe in the long-term EV revolution.