EVs have passed the inflection point is hard to refute given that global sales doubled last year to over 6 million cars. But what about premium electric motorbike markets? asks Carl Delfeld, editor of Cabot Explorer.

In 1903, in a small shed in my hometown of Milwaukee, began an enterprise that would grow and spread across the world. Their innovation and technical creativity on two-wheel vehicles sparked a transportation revolution and an adventure lifestyle that would make Harley-Davidson (HOG) the most valuable motorcycle brand in the world.

Today, the company continues to define motorcycle culture. Now, Harley-Davidson through its LiveWire electric motorcycle line, is the world leader of this category.

Harley-Davidson stock roared to life after the motorcycle maker reported a stunning fourth-quarter profit that saw motorcycle revenue surge 54% as U.S. demand for big bikes returned.

Demand for Harley-Davidson bikes is in an uptrend. This could be the start of a turnaround but Harley needs to now back this up with several consecutive quarters of sales growth. With rebel CEO Jochen Zeitz at the helm, Milwaukee-based Harley has renewed its American brand and focus on the U.S. market.

America is Harley's biggest, most important market, which is why last year was the first year of implementation of Harley's five-year roadmap called the Hardwire, which doubles down on domestic sales while also pursuing international growth.

Harley-Davidson reported a $0.15 per-share adjusted profit for the fourth quarter of 2021, handily beating analyst forecasts of a $0.38 per-share loss and a complete turnaround from the $0.68 per-share loss it recorded a year ago, although its motorcycle business is still operating at a loss of $102 million.

Harley also announced during the quarter it would be spinning off its LiveWire all-electric motorcycle business into a stand-alone publicly traded company through a reverse merger with special purpose acquisition company (SPAC) AEA-Bridges Impact. I hope this SPAC is priced at a reasonable valuation. Harley will still own 74% of the new EV bike company.

Meanwhile, H Partners increased its position in the maker of iconic motorcycles to 12.6 million shares. That figure partly accounts for 300,000 Harley-Davidson shares purchased daily from Jan. 14 through Jan. 24 at prices ranging from $33.23 to $37.91. H Partners now holds 8.2% of Harley-Davidson’s outstanding stock.

Better still, Harley-Davidson is becoming more profitable as it advances its Hardwire strategic plan. CEO Jochen Zeitz is focusing the company's efforts on its most profitable motorcycles while overseeing a more disciplined expansion into its most important international markets.

Harley-Davidson's revenue jumped 40% year over year to $1 billion, driven by a 39% rise in motorcycle shipments. The company also enjoyed solid growth in its general merchandise and parts & accessories divisions, which saw revenue increase 46% and 13%, respectively.

Looking forward, management projects full-year revenue for Harley-Davidson's motorcycles and related products segment to rise by 5% to 10% in 2022.

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