For much of the past decade, Rad Power Bikes was the most recognizable name in electric bicycles that were practical rather than precious. Its chunky frames and accessible prices helped popularize e-bikes in American cities long before bike lanes caught up. That makes its Chapter 11 bankruptcy filing in December 2025 less a surprise than a reckoning—one that says as much about the post-pandemic hangover as it does about Rad’s own missteps.
The filing, lodged in the Eastern District of Washington, paints a picture of a company squeezed simultaneously by shrinking revenues, swelling liabilities and a legal bill that refused to stay in its lane
From Pandemic Boom to Balance-Sheet Bust
Rad’s troubles begin, as so many modern corporate tragedies do, with overconfidence bred in extraordinary times. During the pandemic, demand for e-bikes surged as commuters shunned public transport and stimulus money sloshed through the economy. Rad scaled aggressively—inventory, headcount and global suppliers all expanded on the assumption that lockdown demand would harden into habit.
It did not.
As inflation rose and discretionary spending fell, Rad found itself sitting on more than $14m of inventory, much of it marked as excess or obsolete. Revenues contracted, but fixed costs did not. The result was a classic post-boom squeeze: too much stock, too little cash, and creditors growing restless.
The court filings leave little room for ambiguity about the scale of Rad’s reversal. Revenue fell from approximately $129 million in 2023 to just $63 million in 2024—nearly a 50% contraction in a single year.
Such a decline is not a cyclical wobble; it is a structural rupture. Costs calibrated for nine-figure turnover cannot easily be unwound when sales are cut in half. Warehouses, suppliers, staffing and compliance obligations do not shrink at the same speed as demand. The result was a business burning cash faster precisely when cash was becoming scarce. By the time Rad entered Chap
The Quiet Weight of Litigation
What distinguishes Rad’s bankruptcy from a simple demand slump is the sheer volume of legal and contingent liabilities weighing on the company. The filing lists dozens of disputed, unliquidated claims—product-liability cases, insurance subrogation claims and settlement demands—many individually running into seven figures.
While bankruptcy schedules only list the 20 largest unsecured creditors, they reveal a pattern: claims labelled “damages,” “subrogation” and “settlement” dominate the ledger. Industry observers estimate more than two dozen active or pending legal actions, with potential payouts in the tens of millions. Even if only a fraction ultimately succeed, the legal costs alone are enough to drain a mid-sized manufacturer.
For a consumer-facing brand, litigation is not merely expensive; it is reputationally corrosive. Each claim chips away at confidence among customers, partners and insurers alike.
Uncle Sam Wants His Cut
Then there is the government. Buried among the unsecured claims is a particularly unforgiving creditor: U.S. Customs and Border Protection. Rad lists more than $8.36m in disputed tariff liabilities, stemming from imports of bikes and components manufactured overseas.
Tariffs are unlike trade creditors. They do not renegotiate, and they do not forget. For a company that relied heavily on Asian manufacturing while selling primarily into the American market, the tariff bill became a slow-burning fuse—one that eventually reached the balance sheet.
Assets, Liabilities, and the Shrinking Margin for Error
On paper, Rad entered Chapter 11 with approximately $32m in assets against $73m in total liabilities. Secured lenders sit atop the capital structure, with unsecured creditors—suppliers, insurers, litigants and the federal government—left to contest what remains.
The company’s most valuable assets are not factories or real estate (it owns none), but inventory, intellectual property and tax losses accumulated during years of expansion. Whether these are sufficient to fund a turnaround, rather than a fire sale, remains uncertain.
Losses as an Operating Model
Perhaps the clearest signal that Rad’s trajectory was unsustainable lies not in its bikes, but in its tax attributes. Buried in the asset schedules is a striking accumulation of net operating losses (NOLs)—the accounting fossil record of years spent burning cash in pursuit of scale
Rad reports NOLs of roughly:
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$37.3m from FY2021
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$100.2m from FY2022
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$63.7m from FY2023
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$34.6m from FY2024
In total, well over $230m in accumulated losses, alongside a relatively trivial $12,177 Avalara B2B tax correction. In theory, such losses can be valuable: they may offset future profits, making a company more attractive to an acquirer or investor. In practice, they tell a harsher story. One does not accumulate losses at this scale accidentally—or temporarily.
For several years, Rad was not merely unprofitable; it was structurally loss-making. Growth was financed not by margins, but by capital injections and optimistic assumptions about future demand. When sales slowed, tariffs bit, and litigation piled up, there was no cushion left. The losses had already done their work.
In that sense, the bankruptcy was not a shock but a delayed acknowledgement. A business can survive a bad year. It can even survive a cyclical downturn. What it cannot survive indefinitely is an operating model in which losses compound faster than credibility. Rad Power Bikes reached that point some time ago; Chapter 11 merely made it official.
What Happens Next
Chapter 11 gives Rad Power Bikes breathing room, not absolution. The company will attempt to restructure debts, rationalize operations and—perhaps most importantly—restore credibility with suppliers and customers. That likely means fewer models, tighter quality control and a retreat from the growth-at-all-costs mentality that defined its boom years.
For the broader e-bike industry, Rad’s fall is a cautionary tale. The sector is not dying, but it is maturing. Cheap capital, limitless demand and regulatory blind spots were features of an exceptional moment, not permanent conditions.
Rad helped Americans imagine a future with fewer cars and more electric pedals. Whether it can survive long enough to participate in that future now depends on lawyers, judges—and a balance sheet finally forced to confront reality.
