$WKHS or Workhorse Group is an electric vehicle company based out of Cincinnati, Ohio that specializes in manufacturing electrically powered delivery vans. The company has been around in one form or another since 1998, but became the Workhorse Group in 2015. With a 52 week low of $1.32, the stock has seen a meteoric rise since May 2020 gaining over 800% at its recent closing price of $32.96. It’s current market cap sits just over $3 billion. WKHS reached an all time high in early February when President Biden announced that he plans on electrifying the entire U.S. Government fleet of vehicles, sending the price to $42.96.

While obviously the hype for electric vehicles has caused the stock to surge, the main driver behind WKHS hype is the United States Postal Service contract valued for approximately $6 - $8 billion to upgrade 165,000 vehicles in the USPS fleet. Currently, there are three finalists for the contract. The first, Karsan, is a Turkish company which makes it unlikely that the Federal Government will award it to them over a US company. The second company, Oshkosh (who is partnered with Ford) has proposed to make a van based on an internal combustion engine. Therefore, based on Biden’s recent comments, it is unlikely that this vehicle will be picked. That leaves just Workhorse Group as the contender.

However, there are concerns over Workhorse’s manufacturing (or lack thereof) based upon only $1 million is revenue for 2020. Yet, I think that Workhorse has the ability to pull this contract off. WKHS currently owns a 10% stake in Lordstown Motors (RIDE) which recently bought General Motors manufacturing plan in Lordstown Ohio. At over 6 million square feet and the Lordstown Endurance scheduled to come online in September of this, that plant could have the capability to produce the electric vehicle for the Postal Service.

In January, WKHS received a 6,320 order for its C-Series all-electric delivery van from Pride Group Enterprises. It will be interesting to see how this ‘trial run goes’ and if WKHs can prove it is a serious EV manufacturer.

Lastly, the one thing that concerns me is the contact itself. The contract has been delayed twice in the past year, originally scheduled for last summer, and then by the end of October. Now the Postal Service announced that we will hear a decision by the end of March 2021.

While I do not own the stock, I am currently own options expiring on April 15th and am hoping to see a run up leading to the contract being awarded and also for WKHS to get it. If Workhorse can prove its capability with the 6,300 order and win the USPS contract, I believe that it will be a major player in the EV landscape and have a jump start over other legacy brands, like Ford and General Motors who have recently announced a launch of an electric delivery van.

I’d be interested in hearing your thoughts on WKHS or the USPS contract!