TOKYO -- Motorcycles have long been a laggard in the drive to make vehicles more environmentally friendly, but Kawasaki Heavy Industries plans to shift into high gear and make all its bikes electric for markets in developed countries by 2035.
Several significant challenges lay ahead, however, such as costs and extending range, as well as developing a product that will appeal to the gearhead that loves the feel of sitting atop a rumbling gasoline engine. Like fans of Bob Dylan, will they still be loyal after Kawasaki goes electric?
Globally, the motorcycle market has hit a lull, but the pandemic has stoked interest in ways to travel that lower the risk of infection, creating an opportunity to kick-start the field.
To focus on the motorcycle business and grab a slice of this resurgent interest, Kawasaki Motors was spun off from the parent company on Friday.
"Outdoor leisure activity has been popular during the COVID pandemic. We will strengthen our environmental efforts with our sights set on post-pandemic lifestyles," explained Yasuhiko Hashimoto, president of Kawasaki Heavy Industries. The parent company will concentrate on the energy business, including hydrogen, while peripheral operations such as motorcycles and rolling stock are spun off to increase management flexibility.
"Partnerships with other companies may be possible in the future," said Hiroshi Ito, president of Kawasaki Motors. "Our company is open."
The new motorcycle company will aim to boost sales by a factor of 2.4 to 1 trillion yen ($9 billion) and raise its operating profit margin to over 8% from 6.1% by fiscal 2030 compared with the current fiscal year.
One of main focuses of the company will be environmental friendliness. Currently there are no Kawasaki motorcycles that are powered by electricity, but it plans to introduce more than 10 electric models by 2025. The goal is to completely switch over to electric motorcycles by 2035 in Japan, Europe, the U.S., Canada and Australia. The company plans to launch hybrid and all electric versions. It also plans develop engines that run on hydrogen.
Kawasaki Heavy's motorcycle sales came to 380,000 vehicles in 2020. Despite a global market share of only around 1%, Kawasaki has a strong presence in Japan and North America with its mainstay, brand-name large motorcycles. Global demand for motorcycles was about 44.5 million vehicles in 2020, down about 20% from the previous year due to the pandemic, but appetite for the two wheelers is now growing because they are seen as relatively safe an infectious-disease-conscious world. Kawasaki will seek to expand its market share by focusing on decarbonization, a goal in line with government policies around the world.
Honda holds the crown as the world's largest motorcycle manufacturer. It says it aims to decarbonize by 2050 but has yet to give specific timeline. Yamaha Motor has set a goal of making 90% of its motorcycles electric by 2050. An executive there, however, acknowledges that batteries are hard to come by when competing with passenger cars.
Kawasaki Heavy's electrification goals are more ambitious than those of its competitors, but the challenges are also daunting. Its motorcycles are large and appeal to consumers who enjoy the sound and pulse of the gasoline engine, living by the credo "born to be wild," not "born to be mild."
It also faces the same challenges as carmakers in balancing the switch to electricity with costs, especially with batteries that make up a large part of a vehicle's price.
The new company will also focus on off-road buggies that can venture off pavement. Demand is growing for the vehicles in North America for sport and in farming, and the company will invest 30 billion yen over five years in manufacturing facilities for them. Kawasaki will expand its production capacity at its plant in the U.S. state of Nebraska by March 2023. A new plant will also be built in Mexico, with production to begin in fiscal year 2023.