Rad Power Bikes Teeters on the Brink: Urgent Funding Needed to Avert January Shutdown
Rad Power Bikes, a prominent player in the electric bicycle industry, has recently informed its workforce of a potential cessation of operations by January 2026 unless new funding is secured or an acquisition materializes. This revelation, detailed in an internal communication obtained by TechCrunch, underscores the company’s precarious financial position.
The internal memo, dispatched by Rad Power’s people team, conveys a dual message of hope and realism. It emphasizes that while the leadership is actively seeking solutions to sustain the company’s operations, the possibility of shutting down remains tangible. The email highlights a previously promising opportunity to rescue the company, which, unfortunately, did not come to fruition. The specifics of this potential deal were not disclosed in the communication.
The memo further states, Rad is nothing without its people and wants to ensure that all employees are taken care of and provided for to the fullest extent feasible. Executive leaders are hopeful that a viable solution will be found to ensure that Rad team members remain gainfully employed for the foreseeable future. However, to be fully transparent, despite our collective efforts, it is possible that this may not happen, and Rad may be forced to cease operations.
Seattle-based Rad Power Bikes has experienced multiple rounds of layoffs in recent years, a trend that began in April 2021 with the reduction of 100 staff members. The company has faced significant financial challenges, including tariffs and a challenging macroeconomic landscape. The early days of the pandemic saw a surge in demand for micromobility solutions, benefiting companies like Rad Power. However, a sudden drop in consumer demand left the company with excess inventory, exacerbating its financial woes.
A company spokesperson stated, At this time, Rad’s leadership is focused on supporting our employees, serving our Rad Riders, and giving Rad the best chance for longevity.
The challenges faced by Rad Power are not isolated incidents within the e-bike and micromobility sector. Several companies, including Cake, VanMoof, Superpedestrian, and Bird, have encountered similar difficulties, leading to business closures or restructuring efforts.
Despite these industry-wide challenges, Rad Power has been recognized for producing some of the most compelling e-bikes on the market. In response to escalating financial pressures, the company underwent a leadership change earlier this year, appointing Kathi Lentzsch as CEO. Lentzsch brings decades of experience in revitalizing underperforming companies, signaling Rad Power’s commitment to navigating its current challenges.
In a strategic shift, Rad Power has been exploring partnerships with other companies that could either acquire it or provide the necessary funding to continue operations. This approach reflects a broader trend in the industry, where companies are seeking collaborative solutions to sustain their businesses amidst a rapidly evolving market landscape.
The company’s recent actions include issuing a Worker Adjustment and Retraining Notification (WARN) notice to employees at its Seattle headquarters. This notice indicates that 64 employees could face layoffs as early as January 9, 2026. The internal email clarifies that this is not a targeted layoff but a necessary step due to the number of employees at that location.
The email further elaborates, In the event the company is forced to close, Rad would be required to cease operations on January 9, 2026, or within 14 days thereafter. In that case, Rad expects that any cessation of operations will affect all locations and departments, will be permanent in nature, and that all employees will be terminated effective January 9, 2026.
The e-bike industry has witnessed a series of upheavals in recent years. Companies like VanMoof have faced significant challenges, including bankruptcy and restructuring efforts. VanMoof, once a darling of the e-bike world, paused sales and saw executive departures amid financial struggles. Similarly, Onyx Motorbikes faced turmoil following the sudden death of its owner, leading to operational challenges and customer dissatisfaction.
These industry-wide challenges highlight the complexities of scaling hardware businesses in the micromobility sector. The balance between rapid growth to satisfy investor expectations and sustainable operations has proven difficult for many companies. Rad Power’s current predicament underscores the need for strategic planning, financial prudence, and adaptability in an ever-changing market.
As Rad Power Bikes navigates this critical juncture, the company’s future hinges on securing new funding or a strategic partnership. The coming weeks will be pivotal in determining whether Rad Power can overcome its financial challenges and continue to serve its dedicated customer base.
