Zero CEO: Fleet sales a 'great opportunity' for dealers

Publish Date: 
Mar 21, 2013
By Mike Vaughan

Richard Walker was appointed CEO of Zero Motorcycles in July 2012, after spending more than 30 years in the hi-tech business, including stints with Hewlett-Packard (HP), and most recently Control14, where he served as executive vice president of the Products Group. At HP he was responsible for the HP Pavilion, Compaq Presario and HP Touchsmart product lines.

He brings a unique background to the motorcycle business, and one that may be well-suited for an electric motorcycle company, according to Mike Vaughan, who spoke recently with Walker.


Dealernews: What drew you to Zero?

Walker: The company is full of people with extensive motorcycle experience. So my combination of skills to build a consumer business combined with their knowledge and understanding and depth of understanding of the motorcycle industry is a good match.

How has it gone so far?

'I've just been blown away with the level of passion.'

-- Richard Walker

Walker: The thing that I’ve learned so far is just how passionate people are around motorcycles. In the tech industry you certainly get people who are passionate, but I’ve just been blown away with the level of passion, not just within my own company around motorcycles but as I meet dealers, and customers -- it’s just a joy. We’ve revamped our website from being product- and technology-centric to being customer-centric, and when you click on the video testimonials of our customers and listen to them talk about the experience they get from riding our vehicles, it’s a real pleasure.

We know we’ve got something that people feel is valuable, the experience is very different, and that’s why we’re excited about the chance to build a new business because we need to do that, and that’s where the dealer channel becomes very important to us.

 

How does the Zero experience differ from an internal combustion motorcycle?

Walker: Part of our value proposition to consumers has been that you’re not going to be needing parts. The powertrain’s got a battery, a motor, a controller and the battery management system wrapped around it, so one of the few moving parts is the shaft of the motor to drive the bike. When you get on an electric motorcycle you don’t have the noise, vibration, the emissions; there's no complexity, no transmission, no liquid cooling -- our bike is passively air-cooled. Our whole belief system is driven around simplistic sophistication, which means we can hide the complexity of that in the powertrain and focus entirely on the experience of riding.

One of the advantages of an electric motorcycle is that we can put it on the network, so with model year ’13 we have a Bluetooth capability. You can have two driving modes: Echo mode and sport mode. Sport mode is dialed into the bike; [and] in Echo mode you can restrict the top speed, dial back the torque or up the regenerative braking,

Ultimately we’ll start to build out community-based portions of the application so you can figure out if there are other Zero bikers in the area, and you can share your ride routes.

 

What criteria must dealers meet?

Walker: Our issue is choosing the right dealers. We’ve been trying to build out the dealer channel in North America for about a year and a half. We have 57 dealers.

The thing we’ve learned about dealers who are successful with our products is the principals are very passionate -- they believe that electric is here to stay, they want to be a part of it, and they want to be a part of evangelizing the experience. We get people on the sales floor who really get behind it.  For us, it’s not about signing up as many dealers as we can to get coverage. What we’re trying to focus on is finding the right dealers, someone who believes that electric motorcycles can deliver a great experience for consumers and willing to invest the time to educate.

As we’ve seen at the show, people come along to look at the motorcycles and they don’t know what questions to ask. They look at it and don’t see an engine, they don’t see a muffler, and when you ask if they have any questions, they say, “I don’t…well I’ve never seen one before.” So there’s an education piece that goes with it. Obviously when there’s education, there’s cost, right? It’s easy when someone comes in and asks for something, but [what] if you have to spend time to educate people about the components of an electric powertrain, what kind of experience they expect, the range, how long does it take to charge, and the price? It puts the selling process in a new dimension. So there is an education you have to go through. 

You mentioned other sales opportunities...

Walker: We see fleet sales as great opportunity. We see our core business built around sales of bikes to consumers through the dealer channel, but we also see huge opportunities for the application of our vehicles in fleet applications.

The best example we’ve got right now is the police. It turns out police like the idea of a quiet vehicle for community policing. The city of Monterey [Calif.], and their use of Zero motorcycles is on YouTube and we invite people to view it. They talk about how it fits in with their stated policy of being green, it supports community policing; plus, they can go on trails where people are running and hiking, and they say can sneak up on people. It's a great application for that.

One of the conversations we’re starting to have with our dealers is to knock on the local police department door and explain what first attracted you to these vehicles, and see if you can get them to buy one to evaluate. This can lead to more sales, and of course that has a knock-on effect, when consumers see the police on certain vehicles, it gives a lot more credibility.

 

Do you provide floorplanning and consumer financing?

Walker: We do. We have a relationship with GE and we also have a relationship with Freedom Road, so we’ve got programs to support flooring and consumer financing.

 

What kind of margins can dealers expect?

Walker: I think we’re competitive. We may not be the richest, and we’re a young company. But margin hasn’t been an issue for our dealers. I’d say we’re right in the range of what you’d expect, and at some point when we get bigger and more successful than we are we hope to offer a little more, but right now I’d say we’re competitive. (continued)