It's time to pick a single EV and focus on it before it's too late
As often is the case with EV startups, Workhorse is thin with cash. Lack of significant revenue, combined with high expenses and too many projects started at once, led the company to the edge of bankruptcy.
According to the financial results, the company noted in 2018 sales of just $763,000 (including $21,000 in Q4), compared to $10.0 million in 2017. On the other hand, net loss was $36.5 million, compared with a net loss in 2017 of $41.2 million. In such situation, Workhorse had problems even to purchase parts for ordered vehicles.
Reportedly, Workhorse received orders for 1,100 NGEN-1000 electric vans and 6,000 pickups. The pickups will be delayed (although we can't exclude cessation), while the Surefly design is to be sold for $40-60 million, as Workhorse intends to focus on electric vans and finally start series production and make money.
Transformation is led by COO Duane Hughes, who replaced company founder Steve Burns as CEO.
"The refocusing of the Loveland, Ohio-based startup has included changing chief executives, borrowing $35 million from a hedge fund and absorbing $8 million in warranty expense for defective battery packs in older electric vans. Workhorse also is trying to sell its hybrid “Surefly” octocopter design."
"Without an estimated $40 million to $60 million from the sale of Surefly, Workhorse has just “one or two quarters of runway” to avoid a bankruptcy filing, said Carter Driscoll, a former stock analyst at MLV & Co. and Workhorse investor."
The Workhorse W-15 pickup originally was scheduled for 2018, but now we doubt that it will ever hit the market as development would require serious capital.
Hopefully, more specific NGEN-1000 electric vans will be a niche big enough to survive.