Product Warranty and Recall Campaigns

6 Months Ended

Jun. 30, 2023

Guarantees and Product Warranties [Abstract]

The Company provides a limited warranty on new electric motorcycles for a period of two years, except for the battery which is covered for five years. The Company also provides limited warranties on parts and accessories and electric balance bikes. The warranty coverage for the retail customer generally begins when the product is sold to the retail customer. The Company accrues for future warranty claims at the time of sale using an estimated cost based primarily on historical Company claim information. In the case of both warranty and recall costs, as actual experience becomes available it is used to update the accruals.

Additionally, the Company may from time-to-time initiate certain voluntary recall campaigns. The Company records estimated recall costs when the liability is both probable and estimable. This generally occurs when the Company’s management approves and commits to a recall. The warranty and recall liability are included in Accrued liabilities and Other long-term liabilities on the Consolidated balance sheets.

Changes in the Company’s warranty and recall liability were as follows (in thousands):


	Three months ended				Six months ended
	June 30, 2023		June 26, 2022		June 30, 2023		June 26, 2022
Balance, beginning of period	$	600	$	1,080	$	566	$	1,095
Warranties issued during the period	36		64		105		95
Settlements made during the period	(74)		(204)		(106)		(342)
Currency Translation Adjustments	—		(27)		—		(43)
Recalls and changes to pre-existing warranty liabilities	—		16		(3)		124
Balance, end of period	$	562	$	929	$	562	$	929

There was no liability for recall campaigns as of June 30, 2023 and December 31, 2022, respectively. As of June 26, 2022, a liability for pre-transaction recall campaigns of $266 thousand related to certain H-D branded electric motorcycles was retained by H-D in connection with the Separation and Business Combination.