Rad Power Bikes files for bankruptcy, owes $8.3 million in unpaid tariffs

In the world of the best electric bikes (e-bikes), Rad Power Bikes was one of the most dominant brands in the U.S. market. Times have changed, and now the company has been forced to file Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Washington.

Rad Power Bikes is looking to sell, but it could have a tough road finding a buyer with the debt it's carrying and the recent struggles it has faced. As of this writing, Bicycle Retailer says the company has assets of around $32.1 million and estimated liabilities at $72.8 million, a substantially negative net worth for another firm to purchase. Its inventory of e-bikes, spare parts, and accessories is listed at $14.2 million.

The firm has seen large investment rounds totalling $329 million, with large sums coming from Fidelity, Morgan Stanley and T. Rowe Price. Obviously, that money is gone based on the data in the bankruptcy filing.

So what happened to Rad Power Bikes to take it from one of the top e-bike makers to where it is now? A myriad of factors worked against the company, some of its own doing, some from outside. Much of the popularity happened during the COVID bike boom period, which has long since ended.

Supply chain disruptions and safety recalls (including a recent recall the company couldn't afford for its older e-bike batteries, which had been designated a fire risk by the U.S. Consumer Product Safety Commission and caused 31 fires, including 12 reports of property damage totaling $734,500) on e-bike models didn't help matters.

Finally, several rounds of layoffs and executive turnover certainly put a stick in the spokes.

Another factor that we dug up while reading through the limited amount of public information is that the company's largest creditor is U.S. Customs & Border Protection for unpaid tariffs.

Could the U.S. tariff push have backfired, potentially killing off a U.S. company that was importing goods to make its products? Or is that what the tariffs were meant to do: force companies to source their parts domestically?

The company isn't out of business yet. It could find a buyer, and it will continue to restructure its debt under government supervision. It has also said that it will keep selling bikes and work with customers and vendors as it moves forward with the process.

In a statement to The Verge, a Rad Power Bikes Spokesperson said, "We are not giving up,” spokesperson Kelsey Wolf said in a statement. “We remain deeply committed to our customers and community, and we are focused on doing everything we can to strengthen the future of the Rad brand. We are grateful for the continued support of our riders, vendors, and retail partners as we work through this moment and toward what comes next.”

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