Polaris buys Brammo bike business, will build own electric motorcycles
Long An Investor, Polaris Finally Makes The Jump
Long an investor in Brammo, the transaction should see Polaris begin manufacturing electric motorcycles at its Spirit Lake, IA facility, where it already builds the aforementioned Indian and Victorys, as soon as this summer. The deal will also replenish the dwindling cash supplies at Brammo as it transitions to full-time electric drivetrain development, a segment the firm has intimated has been growing for it of late.
So, what do we make of all this? We can't say for sure whether Brammo's failure to make a go of it comes down to product shortcomings or management missteps. Or both. While its main model, the Empulse, was better looking and featured higher quality components than its main competitor, the Zero S, it was also saddled with a 6-speed transmission that allowed for a smaller motor and better cooling, but gave up some efficiency and added complexity. Some also complained the unit, developed by Italian firm SMRE, was a bit clunky. And while the bike did receive some upgrades, the battery capacity, and thus range, lagged behind that of Zero.
As for the front office, its history is one that includes failure to bring to market a number of products in a timely matter, if at all. Remember the Engage and Encite? How about BrammoParx? Then there's the company's original – and more affordable – Enertia model. After making substantial improvements for 2011, it basically fell off the map, leaving the low end of the market to the competition.
That's not to say team Brammo wasn't without its successes. Its racing program developed a truly awesome bike that many hoped would become the basis for a future commercial model. And its Empulse marketing efforts, including a tie-up with motorcycle-gear maker Icon, brought so much brand equity, it's hard to believe the nameplate will be dropped by its new owners.
From the Polaris perspective, a full-throated entry into the electric motorcycle space is a robust response to Harley-Davidson. Though it's unlikely to offer something in the Project Livewire vein – at least at first, since there hasn't been enough time to engineer a new model from whole cloth – getting its electric wheels quickly into dealerships could give it first-mover advantage and boasting rights.
While our questions to the North Star marque mostly went unanswered, we did get hints that electrification is an important technology that will be integrated into a number of its future products. Certainly, the motorcycle platform, with its space and weight constraints, make a perfect place to develop and hone that capability. Currently, the only power-sports oriented EV it sells is the Ranger EV side-by-side, which doesn't even have modern lithium batteries.
The wait for the Polaris plan should be short. The official press release, which you can read in full below, promises manufacturing to begin in the "second half of 2015." We expect the company will leverage its extensive dealership network to boost sales and use its established buying power to keep costs down on whatever they decide to produce. To see whether the Brammo brand goes bye-bye, or if its attached to a new high-performance machine, stay tuned.
Acquisition Includes Certain Assets, Technology, and Trademarks
MINNEAPOLIS--(BUSINESS WIRE)-- Polaris Industries Inc. (NYSE: PII) today announced it has acquired the electric motorcycle business of Brammo Inc. In addition, Polaris is acting as a leading investor in a recapitalization of Brammo that enables the company to focus exclusively on the design, development and integration of electric vehicle powertrains.
Going forward, the two companies will leverage Polaris' leading position in the global powersports industry to market a variety of electric vehicles utilizing Brammo's award winning lithium-ion electric drivetrain technology, while freeing Brammo to continue developing its innovative electric vehicle powertrains. Brammo supplies these products, including the Brammo Power™ battery pack and Brammo Power™ vehicle management systems, globally to a wide range of OEMs. As part of this transaction, Polaris will utilize the assets acquired to begin manufacturing electric motorcycles in the second half of 2015 at its Spirit Lake, IA facility.
"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. Polaris and Brammo share a goal of adding the most advanced and highest capability electric solutions to Polaris' portfolio of leading powersports products," 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.
Polaris has been a strategic investor and partner with Brammo since 2011. During that time, the companies have collaborated on a number of projects in motorcycles, off-road and on-road vehicles. "Today's announcement strengthens not only Polaris' commitment to bringing our consumers lithium-ion electric solutions, but also this partnership's ability to continue innovating and developing leading electric drivetrain technology," said Wine. "We anticipate a return on these investments and believe the new alignment brings us that much closer to delivering world-class electric solutions across our products."
Brammo has designed and developed numerous electric vehicles, including the award-winning Enertia and Empulse motorcycles. Testifying to its capabilities and technology, Brammo motorcycles have won a number of awards including: 2013 Playboy "Motorcycle of Year" and "Best Electric" (Empulse R), 2012 GQ "Best Stuff of the Year" (Empulse), 2011 Popular Science "Best of What's New" (Empulse), 2011 Motorcycle.com "Best of 2011" and a 2010 Silver Edison Award. In addition, Brammo's motorcycles have won numerous racing championships including the 2013 FIM eRR North American World Cup Champion and 2012 TTXGP World Championship.
Polaris is a recognized leader in the powersports industry with annual 2013 sales of $3.8 billion. Polaris designs, engineers, manufactures and markets innovative, high quality off-road vehicles, including all-terrain vehicles (ATVs) and the Polaris RANGER® and RZR® side-by-side vehicles, snowmobiles, motorcycles and on-road electric/hybrid powered vehicles.
Polaris is among the global sales leaders for both snowmobiles and off-road vehicles and has established a presence in the heavyweight cruiser and touring motorcycle market with the Victory, Indian Motorcycle and Slingshot brands. Additionally, Polaris continues to invest in the global on-road small electric/hybrid powered vehicle industry with Global Electric Motorcars (GEM), Goupil Industrie SA, Aixam Mega S.A.S., and internally developed vehicles. Polaris enhances the riding experience with a complete line of Polaris Engineered parts, accessories and apparel, Klim branded apparel and ORV accessories under the Kolpin, Pro Armor and Cycle Country brands.
Polaris Industries Inc. trades on the New York Stock Exchange under the symbol "PII", and the Company is included in the S&P Mid-Cap 400 stock price index.
Information about the complete line of Polaris products, apparel and vehicle accessories are available from authorized Polaris dealers or anytime at www.polaris.com.
Brammo Inc. is a leading electric vehicle technology company headquartered in North America. Brammo designs and develops electric vehicles including the award winning Enertia and Empulse motorcycles. Brammo is the 2013, FIM eRR North American World Cup Champion. Brammo is an OEM supplier of its innovative Brammo Digital Drivetrain systems including the Brammo Power battery pack and Brammo Power vehicle management system. Brammo has vehicle distribution and marketing operations in North America, South America, Europe, and Asia.
Information about Brammo can be found at www.brammo.com.
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