A Harley-Davidson motorcycle for sale in Berlin. Photographer: Carsten Koall/Getty Images Europe.
Harley-Davidson Inc. withdrew its 2025 outlook, citing a lack of clarity around U.S. trade policy and weakening economic conditions. It also plans to halt additional investment in its electric bike unit.
The Milwaukee-based company joined a growing list of American companies pulling their forecasts as they brace for the impact of President Donald Trump’s tariffs, which the motorcycle maker expects will cost it as much as $175 million this year. “With the level of uncertainty we are seeing and the number of changes happening on an ongoing basis in global tariffs and trade, it’s difficult to predict what policies may impact customers over the course of the year and how consumer confidence will affect discretionary product purchases,” CEO Jochen Zeitz told analysts on a conference call this morning. “We, therefore, are withdrawing our previous 2025 guidance until there is more clarity on the global economy and tariff landscape.”
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The company had previously forecast revenue to be flat or down 5 percent this year, along with a 7 percent to 8 percent operating income margin.
Zeitz, who notified Harley’s board last fall of his desire to step down, is defending his strategy and fighting a proxy battle against one of the company’s shareholders, which has called for the immediate removal of Zeitz and two other board members. The search for his successor is unfolding while the the 122-year-old company contends with falling sales, as high interest rates and the potential impact of President Donald Trump’s trade war crimp demand for discretionary items like motorcycles.
Zeitz said the company plans to reintroduce entry-level motorcycles to the U.S. market starting next year. He also said Harley will stop investing in its LiveWire Group Inc. electric motorbike business beyond a line of credit entered into late last year for up to $100 million and signaled an openness to injections of outside capital. “All signs are pointing to much later EV [electric vehicle] adoption than originally anticipated, given a lack of incentives and inordinately less favorable regulatory environment, combined with a slower expansion of charging infrastructure,” Zeitz said. The CEO has championed the company’s first electric motorcycle and spun out the unit as a separate business through a reverse merger in the fall of 2022. But EV demand has been weaker than expected, and the company has been reintegrating the business unit’s management functions, like customer and dealer support, according to a January research note from UBS AG. LiveWire sold just 33 electric motorcycles in the first quarter, versus 117 a year ago. The unit’s $20 million operating loss was 33 percent smaller than a year ago after a series of cost cutting measures taken in the fourth quarter of 2024, the company said.
Overall, Harley’s first-quarter revenue tumbled 23 percent, to $1.3 billion, missing estimates as motorcycle sales fell 21 percent worldwide and 24 percent in North America.
Harley imports $50 million worth of steel from Mexico and Canada and $50 million worth of components from China, which creates potential tariff exposure, UBS AG noted in a March research note. During President Trump’s first term, the company was ensnared in a tit-for-tat trade war between the United States and the European Union (EU). The company also announced last summer that it would move some U.S. production to Thailand, according to the Milwaukee Journal Sentinel, potentially adding another tariff wrinkle.
Zeitz noted in a memo to employees in April that the company is “facing one of the most challenging times in the long history of motorcycling, including due to many external factors and headwinds,” according to a securities filing. The company is exploring options for its financing arm, including a sale, Bloomberg reported last month. Earnings per share (EPS) has fallen 38 percent from a year ago, to $1.07.
Zeitz sought to rehabilitate Harley’s profits by shrinking inventories and selling fewer bikes at higher prices, while exiting money-losing markets around the world and growing Harley’s apparel business. That strategy has been tested as the highest interest rates in more than two decades dampened U.S. consumer appetite. At the same time, he strained relationships with dealers as he sought more control of merchandise via online channels and trimmed their cut of revenue.
The social restrictions of the pandemic triggered fervent demand for motorcycles, snowmobiles, and boats, and many power sports companies responded by cranking up production, only to see demand fall off as inflation climbed, said Tony Gonzales, CEO of power sports consulting firm Garage Composites in Denver. “The power sports industry as a whole, post-Covid, has had a rough go,” Gonzales said. “What has compounded it and made it worse for Harley-Davidson is you have an individual leading from the front, and he doesn’t realize that if he were to stop and look behind him, nobody’s following him.”
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