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Harley-Davidson Encounters Financial Hurdles in 2025 Due to Declining Sales and Tariff Issues

(STL.News) Harley-Davidson, the legendary American motorcycle maker cherished by riders worldwide, including myself, is currently facing a difficult financial phase in 2025. Despite its storied history and devoted fan base, the brand is struggling with a significant decline in sales, global economic challenges, and rising investor dissatisfaction.

For motorcycle lovers like myself, the roar of a V-twin engine cruising down the highway symbolizes freedom, identity, and legacy. However, even brands that epitomize freedom can suffer from market fluctuations, as shown by Harley-Davidson’s recent earnings report for the first quarter.

Harley-Davidson – First Quarter 2025 Earnings Reflect Financial Challenges

In its Q1 2025 financial results, Harley-Davidson reported total revenue of $1.33 billion, marking a steep 23% decline from the $1.73 billion noted in the same quarter of 2024. The company’s net income dropped even more drastically, falling 43% to $133 million, down from $235 million the previous year. Furthermore, diluted earnings per share (EPS) fell to $1.07 from $1.72, indicating tight margins and a sluggish retail market.

Additionally, the company unexpectedly withdrew its full-year 2025 forecast, citing uncertainties related to global tariffs and economic fluctuation. While this cautious move reflects a prudent strategy, it has left investors anxious for signs of resilience and a robust strategic plan.

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Harley-Davidson Encounters Financial Hurdles

Harley-Davidson – Motorcycle Shipments and Retail Sales Decline

A particularly alarming trend for devoted Harley fans is the notable decrease in motorcycle shipments and retail sales. In Q1 2025, Harley-Davidson shipped only 38,600 motorcycles, a 33% drop compared to Q1 2024. Retail sales mirrored this trend, with roughly 31,000 motorcycles sold globally, down from about 39,400 a year earlier.

In North America, Harley-Davidson’s primary and most devoted market, sales fell by 24%, with just 20,900 units sold. This statistic is disheartening for those of us who appreciate the camaraderie cultivated at Harley events and local dealerships. A decline in new riders could impact the entire Harley community, including dealerships, clubs, and independent repair shops.

Harley-Davidson – Financial Services and LiveWire: Mixed Outcomes

The results from Harley-Davidson Financial Services (HDFS), the company’s financing division, were mixed. While revenue dipped slightly to $245 million (a 2% decrease), operating income increased by 19% to $64 million. This growth is promising, indicating that the financial services division remains a reliable revenue stream amid industry challenges.

On the flip side, LiveWire—the company’s electric motorcycle division—is still struggling to make its mark. In Q1, LiveWire generated $2.74 million in revenue but also incurred a $20 million operating loss, though this was an improvement from the $29 million loss reported in Q1 2024. Only 33 electric bikes were sold in this quarter, a stark contrast to the 117 units sold in the same period last year.

While innovation in electric vehicles is crucial for long-term viability, LiveWire’s slow sales indicate that many riders—myself included—are still captivated by the classic roar of combustion engines over the quiet whir of electric models.

Harley-Davidson – Tariff Challenges and Leadership Changes

A significant factor contributing to Harley-Davidson’s instability is the volatile global tariff landscape. The company estimates tariffs could cost as much as $175 million in 2025. These tariffs influence international production and export costs, prompting Harley-Davidson to reassess its global supply chain strategy.

Adding to the uncertainty is the upcoming retirement of CEO Jochen Zeitz, who has guided the company through the pandemic and into its electrification journey. With his departure looming, the search for new leadership is in progress, and investors are closely monitoring for indications of a turnaround plan.

H Partners, a hedge fund holding nearly a 9% stake in Harley-Davidson, has voiced strong criticism of the current board and executive team. This investor group is advocating for significant changes, highlighting concerns over the brand’s declining market share and strategic missteps. This evolving shareholder dispute could impact everything from production priorities to dealership relationships.

The Future Path for Harley-Davidson

As both an investor and a lifelong rider, it’s evident that Harley-Davidson stands at a pivotal junction. Although the financial outlook is concerning, the brand’s cultural significance and customer loyalty remain robust. Many of us who ride Harley-Davidsons do so for more than just the machines; we cherish what they represent: tradition, freedom, and an unmistakably American spirit.

For a Prosperous Future, Harley-Davidson Must Tackle Key Challenges:

Revive Demand: Reigniting interest among younger riders and broadening product offerings could stimulate sales in a saturated market.
Enhance Global Strategy: Restructuring the supply chain to mitigate tariff exposure and boost cost efficiency is essential.
Balance Innovation with Heritage: While LiveWire shows promise, Harley must ensure it does not alienate its core customer base.
Ensure Leadership Continuity: A strong successor for the CEO role must be appointed with a clear vision to steer the company forward.

Conclusion: Keeping Hope Alive and the Handlebars Steady

For those of us who are ardent fans of Harley black and chrome, these developments extend beyond mere numbers; they affect the very essence of our riding culture. However, Harley-Davidson has weathered storms before. From the Great Depression to the 2008 financial crisis, the company has consistently found a way to navigate adversity and keep its engines roaring.

Let’s hope that 2025 marks a year of adjustment rather than decline. The open road continues to beckon, and for many riders, there’s no better companion than a Harley. With strategic changes and strong leadership, this iconic brand can reclaim its footing and accelerate back to financial stability.

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HARLEY-DAVIDSON is grappling with a new hurdle as the European Union plans to introduce $28 billion in tariffs on U.S. products, including motorcycles, effective April 1.

This legendary brand is expected to experience price increases in Europe, compounding its existing difficulties.

A group photo of Harley Davidson bikers with their motorbikesCredit: AFP

Harley-Davidson motorcycles for sale. — The new round of tariffs comes as the EU seeks to match the 25 per cent tariffs imposed by the U.S. on steel and aluminium.Credit: Getty

These tariffs are part of a growing trade conflict between the U.S. and the EU, with Harley-Davidson being one of the brands most affected.

Recently, the company announced a £250 million loss in revenue, linked to widespread industry issues and a fall in sales.

CEO Jochen Zeitz acknowledged that revenue has been “significantly impacted,” highlighting challenges including an older customer demographic, rising prices, and tough competition from younger riders who often prefer lighter, more affordable motorcycles.

This latest round of tariffs aligns with the EU’s attempt to equalize the 25 percent tariffs that the U.S. has imposed on steel and aluminum, which affect a broad spectrum of products.