Electric motorcycles may soon be showcased at a dealer near you.
That's because Brammo Inc. has signed a partner key to its expansion: General Electric's financing division will provide inventory financing for its dealers. The company also closed the first $13 million tranche in a $45 million Series C funding round that will help it ramp production.
The financing relationship calls for GE Capital's Commercial Distribution Finance unit to provide floorplan financing for dealers to stock, market and sell Brammo motorcycles such as the urban commuter Enertia and the sports motorcycle Empulse, which can travel a range of 100 miles at speeds of 100 miles per hour.
The deal is critical to the build-out of Brammo's dealer network at a time when sales of two-wheeled electric vehicles is expected to rise sharply in North America. The number of electric motorcycles and electric scooters on the road will grow from 17 million in 2011 to 138 million in 2017, reports Pike Research. Compound annual growth rates of more than 71% are expected for the North American market.
"While two-wheeled transport remains the primary means of transport for millions of people in China and other parts of Asia Pacific, most consumers in North America and Europe have remained committed to their passenger cars. Now, however, high petroleum costs, improved customer perception, and government incentives are all contributing to a growing demand for motorcycles and scooters - including those powered by electricity. Particularly in areas where the population is increasingly moving into cities, where large vehicles are often impractical and expensive to own, operate, and park, density has become a driving force for the e-motorcycle and e-scooter markets," says Pike Research.
Brammo sells through motorcycle dealerships in the top 80 metropolitan centers in the US, with a particular focus on San Francisco and Los Angeles. It already works with Sheffield Financial for dealer financing.
It represents a new foray into electric vehicles for CDF, even though it offers inventory financing for other alternative fuel and hybrid motorsports brands. In 2011, CDF provided nearly $32 billion in financing across North America.
"Our deep expertise in the motorcycle sector leads us to believe that dealers are excited about advertising these new products to draw customers into dealerships," says Neeraj Mehta, president and CEO of CDF and a GE corporate officer.
Brammo, which raised a $28 million round of Series B funding in October 2011, is notable for innovative battery and powertrain technology that has potential in other electric vehicles including low speed vehicle markets. Its latest venture capital infusion will help Brammo expand distribution, says Craig Bramscher, CEO of Brammo.
Polaris Industries, a leading maker of all-terrain vehicles, snowmobiles, motorcycles and road-legal electric vehicles, is one of Brammo's key investors and led this latest funding round.
Besides using an electric motor, Brammo vehicles incorporate recycled materials and use just 10% of the material required to make a car.