Rad Power Bikes, a dominant player in the U.S. electric bicycle space, just declared bankruptcy. They only have $32 million in assets but $73 million in liabilities. The company is going through a historic financial transition. It continues to be reeling from mission-altering debts and growing regulatory oversight.
The company is in deep financial distress. It has more than $8 million in unpaid tariffs debted to U.S. Customs and Border Protection agency. These tariffs, imposed during Donald Trump’s administration, have been cited as a contributing factor to Rad Power’s downturn. The company definitely isn’t the only one tanking. Other micromobility companies, such as electric skateboard maker Boosted, have already faced hardships from exactly these kinds of tariffs imposed on Chinese imports.
Rad Power Bikes has been weathering a financial storm. To mitigate this, the company is currently in an active process to divest the business over the next 45 – 60 days. The bankruptcy case is still in process, but the company expects to be operating under Chapter 11 protection while it addresses this complicated process. In response to this story, a spokesperson for Rad Power emailed us the following statement,
“This step allows us to keep operating in the ordinary course of business while we pursue the best possible outcome for the people who rely on Rad every day.”
For Rad Power Bikes, the challenges run deeper. At the same time, the Consumer Product Safety Commission (CPSC) released a warning about the safety hazards posed by the outdated standard batteries used in their bikes. The CPSC has previously announced that these batteries present a grave danger of injury and death. This unusual warning follows their receiving of 31 reports of fires associated with the product. Yet the company is under increasing pressure to tackle these safety concerns, even as it seeks to shore up its own financial woes.
Kathi Lentzch, the newly appointed CEO of Rad Power Bikes, made clear with her first public statements that she is ushering the company into a new phase. She hinted that Rad Power would be pivoting from their previous direct-to-consumer model and more towards establishing retail partnerships. Lentzch expressed optimism about this transition, stating,
“This shift creates new opportunities to reach more riders, strengthen customer relationships, and evolve the brand in meaningful ways.”
November turned out to be a fittingly rough month for Rad Power, capping an uneven couple years. In describing how they ended up going into bankruptcy, Lentzch said they were actively talking about a “very promising” third alternative to raising the money. However, these negotiations ultimately fell through.
Rad Power Bikes obviously has the intention to stay in business through this bankruptcy proceeding. Their focus now is to re-imagine and re-align as an even more powerful collective. The company’s future now rests on either finding a buyer or a successful reorganization of its debts. Simultaneously, it needs to address the safety issues that have arisen.
