Electric motorcycle OEM builds dealer network
Craig Bramscher has a lot to smile about these days. Brammo, Inc., the company that grew out of his garage, is making headway into its electric motorcycle venture.
The company recently announced that it has received $28 million in capital funding from Polaris Industries and two other investors. It also recently received a fleet contract for the government in Hong Kong, and it’s building its U.S. dealer network in preparation for the full release of its models in 2012.
When Bramscher founded Brammo in 2002, he never intended to own a motorcycle company.
“It literally started in my garage,” he said, “and we were working on four-wheel transportation originally and even ended up building a car called the Ariel Atom.”
The Atom, a roofless performance vehicle, did well for Brammo, as the company sold $20 million worth of the cars. But experimentation with the car brought the company in a new direction. Bramscher was still focused on acceleration and torque, but he also wanted to explore an electric engine.
“We kept making the car smaller and smaller, and we just realized that it needed to be a motorcycle,” Bramscher recalled.
In 2006, the company designed its first electric motorcycle — the Enertia — and immediately found its calling. The prototype of the Enertia received much praise, so Bramscher decided the company had found its new path.
“The response was so strong that we realized we really had something, so we sold off the four-wheel side of the company and dove into the two-wheel side,” Bramscher said.
Since then, the company has been growing, exploring R&D and creating new motorcycles in a variety of segments. Brammo now boasts five models — the Enertia, the Empulse sport bike, the Engage and Encite dirt bikes and a supermoto based off the Engage and Encite. The motorcycles were built from scratch as the original plan to place a battery where a gas tank sits on most motorcycles proved to be a challenge.
“With a battery, you’re somewhat constricted because you end up with a big block of energy,” Bramscher said.
However, Brammo figured out the best layout for its proprietary battery and even patented the chassis layout of the battery. The Empulse is the top-of-the-line model, as it can travel 100 miles per charge and reach 100 mph.
Brammo’s technology is so unique that it has drawn interest from some major investors. Polaris Industries recently invested an undisclosed amount into the company in exchange for access to the battery technology.
“For Brammo, we get a lot of help with growing the company,” Bramscher explained. “[Polaris is] obviously one of the best in terms of financial performance and in terms of development in product and are very proactive in bringing product to customers.”
For Polaris, the deal means the OEM can use Brammo’s electric drivetrain along with the company’s battery technology. Brammo gets a capital investment and can also leverage Polaris’ dealer network as it sees fit.
“We’re not that interested in selling our product to every motorcycle and ATV manufacturer, so focusing on Polaris keeps us focused on our company,” Bramscher said.
The Polaris investment, along with additional contributions from NorthPost Investments and existing shareholder Alpine Energy, allows Brammo to grow in ways not possible without such capital.
“We have been a startup even though we’ve been around for a while. That capital allows us to grow the team, grow our R&D,” Bramscher said.
Brammo also plans to spend some of the recently acquired funds on traditional marketing. So far all of the company’s advertising efforts have been online, so traditional advertising and public relations efforts are expected to help spread the word about Brammo.
Announced within a week of the large investment was a contract Brammo entered into with the government in Hong Kong. Under the terms of the agreement, Brammo, through its Hong Kong distributor, JCAM Advanced Mobility Company Ltd., will be the sole provider of electric vehicles for Hong Kong’s governmental departments. Brammo Enertia Plus motorcycles will replace previously used petrol-powered motorcycles.
“Fleet sales in general are hard for a small company because there’s such a long lead time, but the Hong Kong government was really in favor it,” Bramscher reported.
Government employees have been test-driving the motorcycles throughout the city for some time, and that trial run lead to the final agreement. Bramscher said now that this deal has been made, the company will begin to look at more fleet opportunities, as many municipalities now require that a set number of electric vehicles are used in their fleets.
Coming to consumers
Along with the big deals being made, the everyday rider will soon get a chance to purchase a Brammo motorcycle. The Enertia is being sold now through Brammo and a limited number of dealers, and the Enertia Plus will be ready by the end of this year, but the full dealer network is just beginning to be established.
“We have about 30 or 40 U.S. dealers right now that we’re going through the paperwork with,” Bramscher said.
The initial dealers will be fully signed on within the next five to six months and be prepared for sales by the 2012 riding season. Brammo will only sell its motorcycles through dealer channels. The company is hoping to sign about 100 dealers in metro areas in 2012, with further expansion planned for 2013. Establishing a small network initially is important for the company that is just beginning to ramp up full production.
“With the first year of production of the majority of all the new bikes, we’re going to be a little supply constrained,” Bramscher said.
Brammo is seeking the top dealers in each market it explores. It seeks dealers that can educate customers, encourage feedback from customers, engage customers on social media and those that have service departments that are technologically savvy enough to keep up with Brammo’s ever-evolving electric technology.
“We tend to focus on dealers that really understand their customer and provide excellent service and that really like talking to their customers, because this is a new product,” Bramscher said.
Brammo already has hundreds of pre-orders on its Empulse and Enertia plus. The company expects sales to mostly be dependent on how many motorcycles it can kick out next year. Though the first 100 units of each bike are built at Brammo’s Ashland, Ore., headquarters, the final assembly of the mass-produced models will be completed in Hungary, where Brammo’s battery producer, Flextronics, is based. Eventually the company plans to have assembly operations on all continents where the vehicles are sold. For now, it expects the Hungary facility to be able to produce thousands of bikes for the U.S. for 2012.
“I think we can sell everything we can make next year for sure,” Bramscher projected. “The next year we should jump up dramatically [in sales].”
Short-term, the company is looking forward to getting more of its motorcycles on the road in 2012. From there, it will listen to customer feedback and seek to develop models that the market warrants. To that end, the company is joining a minority that are hiring in this economy.
“We’re looking for great people that understand motorcycles and electric engineering and mechanical engineering, so we’re on a tear trying to hire the best and the brightest,” Bramscher said.
Brammo is also developing a line of gear appropriate for riders of its motorcycles and non-riders alike. That line may be available starting in 2012.
“For us right now, we’ve got a lot of product that we’re announcing, so getting them into customers’ hands at super high quality and value is the near-term plan,” Bramscher said.
If his company continues the successful course that it’s on, there’s no doubt Bramscher will have more to smile about in the coming years.