Polaris Industries has acquired the electric motorcycle business from Brammo, Inc. Polaris is also acting as a leading investor in the recapitalization of Brammo, which will enable Brammo to focus exclusively on the design, development, and integration of electric vehicle powertrains.
This means that Polaris will takeover building electric motorcycles at its Spirit Lake, IA production facility, and that Brammo will continue developing EV powertrains for Polaris and other OEM partners. According to its press release, Polaris will start production of electric motorcycles in the second half of 2015.
“We have enjoyed our involvement with Brammo Motorcycles over the past three years, and our excitement about their industry-leading lithium-ion electric drivetrain technology has increased commensurate with their improvements in cost and performance,” said Scott Wine, Polaris Chairman and CEO.
“The agreement allows both companies to be more agile during the development cycle with clear accountability toward selling products that exemplify Polaris’ standard for delivering world class vehicles.”
Loyal A&R readers will know that Polaris has been a strategic investor and partner with Brammo since 2011, Polaris pumping $28 million in Brammo, Inc. Brammo closed a Series C round of investment in mid-2012, but has been silent on the fundraising front since then.
The company’s go-t0-market strategy has been stalled as well, after Brammo initially hoped to sell its motorcycles through Best Buy retail stores. Brammo switched to a more traditional model in 2011, but failed to sign-up a meaningful number of dealers.
As such, sales from Brammo have been in the hundreds for the company’s flagship Empulse R electric street bike (most of which found their way to Europe), which features a gearbox like a conventional gas motorcycle.
Today’s new should mean that Brammo can return to being a hub of EV powertrain development, without having to worry about bringing any consumer products to market — leaving that end of the stick for Polaris.
Of course, we have seen a similar movement in the EV world as this, when Mission Motors went from being a motorcycle company to a powertrain provider. The move didn’t prove to be a successful one for the San Franciscan company, which could be an indication of how competitive that space already is for small companies.
In the case of Brammo, this arrangement might be the next best alternative to Brammo closing completely, as sure money was running thin for the startup.
With Polaris and a handful of other accounts, Brammo might be profitable on paper as an EV R&D hub, with a small staff of engineers and designers.