Inventories are valued at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) method for electric motorcycles and related products and average costing method for electric balance bikes and electric bikes. Inventories, net consisted of the following (in thousands):


	June 30, 2026		December 31, 2025
Raw materials and work in process	$	1,285	$	49
Electric motorcycles, electric balance bikes and electric bikes	10,787		14,167
Parts and accessories and apparel	1,549		1,039
Inventories, net	$	13,621	$	15,255

Accrued liabilities primarily includes accrued payroll and employee benefits of $2,515 thousand, the current portion of accrued warranty and recalls of $1,640 thousand (as discussed in Note 10, Product Warranty and Recall Campaigns), and accrued engineering costs of $1,724 thousand as of June 30, 2026. Accrued liabilities primarily include accrued payroll and employee benefits of $4,553 thousand, accrued warranty and recalls of $1,449 thousand, and accrued engineering costs of $1,356 thousand as of December 31, 2025.