Energica – What The Company's Troubles Tell Us About The Electric Motorcycle Business. - Adventure Rider

Image: Michael Uhlarik/Motorcycle Global

We’ve talked plenty about Energica on ADVrider in the past. See here if you need some background—Ed.

Today, Energica Motor officially announced that the company was entering liquidation, a situation that had been reported in the Italian press last week. This pioneer of electrification on two wheels, the first OEM to deliver electric motorcycles with near-peer performance versus combustion bikes, said in a statement that despite working for two years to secure additional funding and protection for its workforce, the deadline had passed and the company would cease operations.

Motorcycle media outlets and many commentators were quick to blame the products, arguing that this was additional evidence that there is insufficient demand for electric motorcycles, which they say are too expensive and not as capable as traditional combustion types. While electric motorcycles do suffer from certain disadvantages, such as elevated costs and charging speeds, low demand and disappointing performance were not the cause of Energica’s problems.

Energica was small company, employing at its peak only about 80 people, which is less than half of rivals like Zero or Livewire. What set Energica above the others was the quality of their vehicles, market demand and capital efficiency. In 2022 alone, Energica delivered a record 1,100 motorcycles, introduced a completely new platform, and reported a backlog of orders with almost no marketing activities. Their motorcycles won praise for fit and finish, a traditional weak point among electric vehicle startups, exceptional handling and overall performance which was closer to premium combustion motorcycles then any other EV motorcycle brand.

While US-based electric motorcycle startups like Livewire and Zero raised around $400M each, Energica managed to develop four production models in less than a decade, create an international electric racing series, and deliver almost 2,000 reliable electric motorcycles for less than $20M.

Unlike Livewire, Sondors or other startups, Energica’s electric motorcycles were delivered on time, with specifications that met or exceeded original promises and did not suffer frequent recalls for manufacturing errors, or embarrassing electronic failures.

Image credit: Michael Uhlarik/Motorcycle Global

Energica’s newest model, the Experia, was a road-biased adventure tourer that matched the price, road handling and performance of combustion rivals like the Ducati Multistrada GT or BMW R1300 GS. Real world touring range and vehicle weight were almost at par with gasoline equivalents, while costing the same to buy and significantly less to own and operate. Energica mastered high-voltage DC fast charging for motorcycles, allowing the bikes to recharge fully in about 40 minutes.

Of the many English-speaking media outlets to have reported on this story, Common Tread best outlined some of the real problems behind Energica’s demise. The company was acquired in 2021 by American private equity firm Ideanomics for $13M. The new owners promised to provide cash for developing new vehicles, increasing production and expanding sales globally. Unfortunately, Ideanomics was plagued with scandals, accused of accounting fraud by the SEC and forced to pay hefty fines. Ideanomics’ stock value vaporized, halting investments into all of its companies, including Energica.

Image credit: Michael Uhlarik/Motorcycle Global

That Energica could not raise more capital as this was happening is evidence of the overall investor attitude towards electric vehicle ventures at the present moment, but also highlights the high risks of negative associations. Venture capital firms are cautious about putting their clients money in with co-investors who may have dubious reputations or active lawsuits.

Energica made, objectively, the highest quality, high performance electric street motorcycles to date. It is likely that the assets will be picked up for pennies on the dollar quickly, as was the case with Cake. Unlike Cake, the new owners of Energica will have a turn-key OEM with a reputation for desirable products that do not require re-engineering for reliability, quality or profit.

Image: Michael Uhlarik/Motorcycle Global

The electrification of motorcycles continues unabated. For motorcycles making less than 12 horsepower (that’s 96 percent of all motorcycles worldwide), electrics have hit 5 percent of new sales in 2023, and more than 22 percent if you include China. For us performance enthusiasts in highly developed nations, it is unlikely that electric motorcycles will play a significant role in our markets for at least another decade.

What does this mean for Can-Am and Livewire in the coming year? Nothing good.