President Trump’s trade war is about to see another player in the motorcycle industry jump ship from American soil, and this time it is heavyweight Polaris Industries. According to a report by the Minneapolis/St. Paul Business Journal, Polaris is considering moving some of its production capacity to Europe, eyeing a production facility in Poland that would build units for the European market. The move is a direct response to the retaliatory tariffs imposed by the European Union on motorcycle imports, which itself was a response to the Trump Administration’s taxing of steel and aluminum imports.
Polaris Industries says it is working on a new electric motorcycle, to replace the now discontinued Victory Empulse TT model that was scrapped when the Minnesota company closed the doors to the Victory brand earlier this year. According to a report from Reuters, the new electric motorcycle will be released under the Indian Motorcycle brand name, and will be focused towards riders who ride for pleasure, rather than those who commute or do long-distance trips. The report says that Polaris is targeting a 120 to 140 mile range – almost double of what was available from the Empulse TT – from this new electric motorcycle model, when ridden at an aggressive pace.
Episode 43 of the Two Enthusiasts Podcast is out, and it focuses on the demise of Victory Motorcycles, which was recently shutdown by Polaris Industries. Of course, when we say that the show focuses on just this one topic, we mean that in the Two Enthusiasts’ sense of the word.
As such, from the ashes of the Victory discussion spring forth a myriad of topics, the current landscape of the American motorcycle industry, the rise of a new generation of motorcyclist, the industry’s slow willingness to change, and how that all plays into the products and actions we seeing manufacturers making.
There is a lot to chew on in this 75-minute show, and we hope you find the episode as interesting as we do.
You can listen to the show via the embedded SoundCloud player, after the jump, or you can find the show on iTunes (please leave a review) or this RSS feed. Be sure to follow us on Facebook and Twitter as well. Enjoy the show!
Trademark applications with the USPTO show that Polaris has registered “Victory Charger” as a mark to be used with “electric motorcycles and structural parts therefor.” The application is a strong hint that we could see an electric cruiser from the Victory brand, which is owned by Polaris, in the coming future. The news is especially timely, as Polaris just acquired Brammo’s electric motorcycle business, and plans on building electric motorcycles at the company’s facilities in Spirit Lake, IA. As if there wasn’t already enough fuel for the fire, on a product roadmap for investors, Brammo listed an “eCruiser” as a possible future model — a model that could easily be repurposed for the progressive Victory cruiser brand.
Polaris Slingshot owners should take note, as Polaris Industries issued a “Stop Sale & Stop Ride” this week for two issues found on the Slingshot. As the name implies, this special recall advises all Slingshot owners to stop riding their three-wheelers, and all Slingshot dealers to stop selling the vehicles, until the two issues are resolved. The first issue involves the ball bearings on the steering rack, which have been deemed faulty by Polaris. It’s been determined that because of the faulty ball bearings on the Slingshot, the steering system could fail, resulting in an unexpected total loss of steering. The second issue involves the roll hoops over the driver and passenger seats on the Slingshot.
According to an analyst from UBS Investment Research, Indian Motorcycles is on track to outsell its sibling company Victory Motorcycles in 2014, its first full year of sales since the company’s recent rebirth. If this prediction turns out to be accurate, this will be a huge feat for Indian, considering the fact that the American brand only sells three models since its relaunch in August of last year, compared to Victory’s current 15 model lineup. Among other predictions boosting revenue for Polaris in 2014 is the release of the Slingshot, a three-wheeled, reverse trike that will be powered by a 2.4L Ecotec four-cylinder engine from GM, which may give the KTM X-Bow and Campagna V13R some stiff competition.
Polaris Industries has announced that it has bought back 3.96 million shares of the company’s stock from Fuji Heavy Industries, for the tidy sum of $497.5 million — roughly 6% of Polaris’ total market capitalization.
Paying for the stock purchase with roughly $247 million in cash, and $250 in credit, the move is a response to Polaris’ continued push to develop its own engines in-house.
For some background, Fuji Heavy Industries was the sole-engine supplier to Polaris from 1968 until 1995, at which time Polaris began developing its own power plants.
Despite that shift nearly 20 years ago, Fugi has had an integral part of Polaris’ business up until this point, and in 2013 one in four engines in the Polaris model lineup was built by Fuji Heavy Industries.
For 2014 onward though, the use of Fuji engines is expected to drop as Polaris produces more of its own units.
It is a fact that isn’t often discussed in the motorcycle industry, but roughly 50% of all on-road motorcycles sold in the United States come from a little company called Harley-Davidson. In 2012 for instance, the Bar & Shield brand sold 161,678 units here in the US, while for the same year the MIC reports 318,105 on-road units were sold nationwide, across all manufacturers. It is easy to be critical of Harley-Davidson, and there are plenty of things to be critical about, but one cannot deny the fact that if Harley-Davidson is responsible for the lion’s share of what we call in passing the motorcycle industry. For Polaris Industries CEO Scott Wine though, Harley-Davidson’s motorcycle dynasty is seen as a market opportunity, though a risky one. Chewy.
Brammo announced today that it has raised another $13 million, in a Series C funding round that was lead by Polaris Industries. Hoping to secure a total of $45 million over the course of the entire round of funding, the investment by Polaris is the second one that American company has made into the Ashland-based electric motorcycle company.
Polaris first invested in Brammo back in October, as the Minnesota-based company was rumored to be taking a close look at a number of electric motorcycle firms for a strategic partnership. Ultimately settling on Brammo, Polaris was a part of the Oregonian company’s $28 million Series B funding round, and is said to have lead this current Series C tranche.
After being courted by several major OEMs according to our sources, electric motorcycle manufacturer Brammo received a minority investment by Polaris Industries today. The move will give Polaris access to Brammo’s proprietary electric powertrain technology, and positions the large OEM to enter further into the electric motorcycle market as a strategic partner to the Oregonian company. In the process of this investment, Brammo has also closed a $28 million Series B round of funding that also included contributions from repeat investor Alpine Energy and first-time Brammo investor NorthPort Investments, LLC.
Polaris has already been aggressively expanding into new market segments this year by buying both Indian Motorcycles and electric car manufacturer GEM. Polaris’s investment in Brammo, the two companies will form a strategic partnership that will presumably see Brammo’s electric drivetrain in different Polaris Industry products, which gives the American company a formidable ally in the move to electric-powered vehicles. For Brammo, the news bodes well as it not only means an infusion of fresh capital, a roadmap to further funding, and a step closer to a possible exit, but Polaris will also be sharing its vast array of technical, sales, and support knowledge to the electric startup.
Zero Motorcycles has quietly announced some interesting news: that Mark Blackwell, V.P. of Motorcycles at Polaris Industries, will be joining the electric motorcycle company’s Board of Directors. With a plethora of reasons as to why an industry veteran like Blackwell would join Zero’s board, it’s been no secret that the Scotts Valley company has been collecting seasoned industry professionals like pokemon characters, seemingly building a brain trust of people who actually know how to run a motorcycle company.
Blackwell’s addition to Zero is interesting because it could signal a relationship with the Polaris V.P. that goes beyond merely an advisory/visionary position, which is the core responsibility of a companies board. The timing is interesting as well, as Polaris has been on a buying spree, first acquiring the original American motorcycle company brand: Indian Motorcycles, and a few days later electric car manufacturer GEM. With a Polaris executive sitting on Zero’s board almost immediately after these aquisitions, one has to wonder if this isn’t a precursor to some sort of larger arrangement between the two companies.