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The largest U.S. manufacturer of electric motorcycles is getting more international. Zero Motorcycles has signed an agreement with Integrated Micro-Electronics Inc. (IMI), a manufacturing services company based in the Philippines, to build complete Zero motorcycles and sub-assemblies.
The partnership with IMI comes one month after Zero laid off about 10% of its global workforce, including personnel involved in production at Zero's headquarters in Scotts Valley, California. Based on the statement issued by Zero, IMI will build complete motorcycles but will also produce "partial, modular assemblies to be finally completed by Zero manufacturing teams, together with the battery module and electronics of the vehicle." So it appears at least some final assembly will continue to be done by Zero directly.
The statement added that the motorcycles built by IMI will be aimed primarily at European and Asian markets, which makes sense. Why build motorcycles in California to sell in Asia when you can build them in Asia at less expense?
"This collaboration will be transformational for Zero Motorcycles' operations," said CEO Sam Paschel. "Expanding our manufacturing footprint into a new region allows Zero Motorcycles to efficiently scale up to meet the rapidly growing demand for our products and improve customer delivery and satisfaction in the fast-growing EV market."
Production is expected to start as soon as the second quarter of 2023 at the IMI facility in Laguna, Philippines.
Zero is certainly under pressure from investors to achieve profitability. The company recently raised $167 million, including an investment from Indian motorcycle giant Hero MotoCorp. The capital raise, agreement with Hero, and layoffs of staff, all coming around the same time, led to considerable speculation that production of Zero Motorcycles could be moved to India, but now it turns out that some or most of that production will take place in the Philippines, instead.
Between production delays and estimate revisions at LiveWire to layoffs and a troubled initial public offering of stock at SONDORS to layoffs at Zero, it's been a tough first quarter for California-based electric motorcycle manufacturers.
