Fri. Oct 18th, 2019

How Tesla could rescue the US motorcycle market (TSLA)

Source: http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/OlrD7SDOw0k/how-tesla-could-rescue-the-motorcycle-market-in-the-us-2019-10

How Tesla could rescue the US motorcycle market (TSLA)

  • Tesla CEO Elon Musk has said that the company isn’t interested in making a motorcycle.
  • But the incipient electric motorcycle industry in the US could use some help — and Tesla would be a welcome addition to the team.
  • Motorcycle sales in the US have been stagnant, and newer, younger riders aren’t taking up the passion, so the market needs something to spur it.
  • Visit Business Insider’s homepage for more stories.

Tesla CEO Elon Musk has said that the all-electric car maker is totally, completely uninterested in building a motorcycle. 

He points to his own youthful experiences as a rider, including at least one incident when he claimed he was nearly killed at the tender age of 17 in a close-miss accident. The lucky break clearly affected him; he’s declared that Tesla, the world’s best-known and most successful electric-vehicle company, would never do an electric two-wheeler.

Missed opportunity, if you ask me (I won’t argue with Musk’s background because motorcycles are a lot more dangerous than cars, but most riders are aware of that and have accepted the risks). Motorcycle sales declined substantially before and after the Great Recession and haven’t shown signs of recovering any sort of upward trajectory. For roughly the past 10 years, half a million bikes had been sold annually in the US.

That plateau, combined with an aging demographic for brands such as Harley-Davidson, has led to widespread speculation that the motorcycle industry could be entering a period of slow, structural decline. The only long-term solution to that problem is to get younger riders interested in throwing a leg. 

I think there are five ways to speed up that solution — and critically, I think Tesla is what the market needs to rebound. Here’s why:

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1. Tesla should be the Honda of electric transportation — on two wheels and on four.

I’ve already argued that Tesla should aspire not to be a Silicon Valley tech-car-maker-manqué, but a real car maker, like Honda. The Japanese company makes everything from portable generators to private jets. So you can see how Tesla might aspire to a similar industrial culture: the company also makes energy-storage systems and, of course, its sibling SpaceX is an increasingly important aerospace player.

Honda also makes a lot of cars — and motorcycles. In fact, motorcycles were how it got started in the US. Its bikes are splendid, always a great option for anyone who wants to get on two wheels. 

Musk’s apprehensions aside, this seems like a natural product line for Tesla to develop.

2. Harley-Davidson is trying to be the Big Guy in electric bikes, but it’s going to be a tough challenge.

The are several electric motorcycle brands in the US that aren’t Harley-Davidson — California’s Zero Motorcycles, for example — but the overall market for electric bikes remains very small. It could grow in the coming years, but a best-case scenario would be electric cycles taking up 5%.

It’s possible that Harley’s LiveWire, when it goes on sale in 2019, would capture a huge percentage of that market and that growth. But the LiveWire is going to be a $30,000 motorcycle — extremely expensive. That’s a good initial strategy, as it almost ensure LiveWire’s profitability. But if Harley, along with Zero and others, can build a serious market, it could could use Tesla’s help.

If Tesla jumps in, Harley’s efforts would be validated, and the US electric motorcycle market could achieve staying power.

3. The Tesla brand would get people who’ve never thought about motorcycles to give one a try.

Motorcycles are intimidating. Plenty of folks might have considered riding, but they can’t overcome their anxieties, and the main brands in the US have been around for a long time and cater to committed customers who aren’t afraid to ride.

Tesla could change that, and not incidentally encourage a host of Silicon Valley millennials to give motorcycling a shot.

On top of all that, I’d expect a Teslacycle to be ferociously cool, ferociously fast, and ferociously fun.

4. Electric motorcycles are better.

No gas, no noise, no gears to shift. Everybody I know who used to ride but gave it up has told me that electric motorcycles could get them back in the saddle.

5. Governments could raise their level of support for electric motorcycles.

I think the process of getting certified to ride a motorcycle in many states is too onerous. Yes, it’s necessary. But electric bikes, being easier to ride, could streamline the process. Governments could also expand tax incentives and other enticements to encourage motorcycle buyers to go electric.

Tesla would be well-positioned to grab some of that action.

Source: http://feedproxy.google.com/~r/typepad/alleyinsider/silicon_alley_insider/~3/OlrD7SDOw0k/how-tesla-could-rescue-the-motorcycle-market-in-the-us-2019-10