BRP abandons the electric bike

BRP abandons its electric bike projects after two years of reflection. Result: the Quebec manufacturer of recreational vehicles is carrying out layoffs in Bromont which are in addition to the hundreds of jobs eliminated this year within the organization.

The company is ceasing all activities related to the development of electric bicycles in order to concentrate more on its activities related to motorsports.

“This decision unfortunately has repercussions on a small team of employees and consultants working on low-voltage and human-assisted products in our Bromont office,” specifies the spokesperson, Émilie Proulx.

Around twenty employees are affected by layoffs in Bromont this fall.

The activities in Bromont were part of the LVHA Group (Low Voltage & Human Assisted), a commercial entity created two years ago to explore new markets such as urban mobility.

BRP had invested by notably acquiring an 80% stake two years ago in a German company specializing in mechanical gearboxes for traditional and electric bicycles. The value of this investment in the Pinion company had not been disclosed. This acquisition was to help facilitate BRP’s entry into the electric bicycle market.

Émilie Proulx maintains that the decision affecting the Bromont office has no impact on the Pinion team in Germany. “Pinion remains part of BRP and continues to offer its cutting-edge gearbox technology to more than 100 international manufacturers of traditional and electric vehicles,” she says.

When discussing BRP’s electric shift and the company’s plans for electric bicycles, big boss José Boisjoli told The Press last year in Europe, people sold their second car to buy an electric bike. José Boisjoli said he believed that this trend would eventually arrive in America.

Even though he affirmed that BRP would not be ready to offer electric bicycles in the very short term, José Boisjoli maintained that BRP was deploying “a lot of energy” because of the size of the market to be seized.

The global electric bicycle sector represented US$26.5 billion in 2021, according to data from the firm Statista.

The new cuts reflect a more difficult situation for the company. Job losses since the beginning of January exceed the 1,150 mark, the equivalent of more than 5% of the global workforce.

Faced with weaker than expected demand for its products, management has lowered its revenue forecasts for the current financial year twice this year.

Restructuring costs of around 15 million appeared in the quarterly results published last month. These costs, entirely related to reduced production and deliveries, were included in an inventory management initiative to protect dealers.

The management specifies The Press that this decision led to workforce adjustments during the months of May, June and July of approximately 850 employees at the production level in Mexico for the motorsports group and in the United States in the marine group’s factories.

In March, BRP pointed out that due to the increase in inventories at dealers, the production rate had to be adjusted, which resulted in a reduction in the workforce needed to assemble snowmobiles affecting 300 positions.

BRP stock continues to be under pressure and hit a 52-week low during Thursday’s trading on the Toronto Stock Exchange. The stock closed at $79.41.

BRP has just under 20,000 employees worldwide.