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Workhorse [WKHS] Due Diligence

original post removed for a different ticker in the block of text, after about 14 edits I fixed most format issues. sorry for errors.

Originally posted to my channel — information should be up to date but may have missed grammatical shorthand errors. All info is post-USPS debacle, and assumes they get ZERO part of the contract in the future.


Workhorse describes itself as a technology company focused on providing sustainable and cost-effective solutions to the commercial transportation sector by creating all-electric delivery trucks and drone systems, including the technology that optimizes the way these mechanisms operate

  • Workhorse was founded in 2007 under the name AMP Electric Vehicles
    • They first experimented with adding battery-electric power to two-seat roadsters
    • Contracted to complete the 100% electric GM Sky
    • Additionally, AMP Electric Vehicles were responsible for the creation of electrification packages for the Chevrolet Equinox SUV, the Jeep Grand Cherokee and the Mercedes Benz ML350
    • Later, AMP Electric Vehicles went public in 2010 trading on the OTC market under the ticker AMPD
    • Acquired the Workhorse brand and assembly plant in March of 2013
    • The asset acquisition established them as an Original Equipment manufacturer, or “OEM”
    • March of 2015 AMP formally changed its name to Workhorse Group Incorporated
  • Workhorse today trades under the ticker WKHS
    • Market Cap: $1.8 billion (finviz)
    • Share Price: $15.05
    • 122.63 million shares outstanding/112.69 million float
    • Short Interest last reported around 40% for the end of May; Not a chart-boy so no commentary on this.


  • Duane Hughes, CEO
    • He served as COO for Cumulus Interactive Technologies Group as well Vice President of Sales and Operations for Gannett
  • Robert Willison, COO
    • Previously held senior management positions at Hughes Aircraft and Texas Instruments as well as being the former Director of Fleet Technology at Sysco
  • Steve Schrader, CFO
    • Previously worked for a group of utilities that are now part of Duke Energy prior to acquisition in 2006
  • Don Wires, Director of R&D
    • Worked at P&G for 35 years where he was the first Technology Associated Director for Power, Control, & Information Systems
    • Co-author of several patents on machine automation and safety systems
  • Chris Nordh, VP of Commercial Development
    • Previously Senior Director of Advanced Vehicle Technology & Energy Products with Ryder System Inc., Nordh joined Workhorse in Feb 2021


  • Duke Energy
    • Charging Station Infrastructure (Steve Schrader connection)
  • EnerDel
    • Strategic Supply Agreement (battery)
  • Moog
    • Horsefly Development & Manufacturing
  • Prefix
    • C-Series Prototype Partner
  • Ryder
    • Service & Maintenance Agreement
  • TPI Composites
    • Strategic Supply Agreement
  • Coulomb Solutions
    • CATL Battery System (battery)
  • JB Poindexter & Co
    • Product and offerings
  • UPS
    • Drone Delivery testing partner

Intellectual Property

  • five pending trademark applications and fourteen issued trademark registration with the intention of seeking more
  • nineteen pending U.S. and foreign patent applications, and eight existing patents, two of which are design patents with the intention of seeking more.
  • Most notably, a patent with 2036 expiration for “Package delivery by means of an automated multicopter UAS/UAV dispatched from a conventional delivery vehicle”

Delivery Vans


"Last mile is a term used in supply chain management and transportation planning to describe the last leg of a journey comprising the movement of people and goods from a transportation hub to a final destination." – Wikipedia, baby.

C-Series Vehicles

  • C1000 & C650
    • 324” vs 247” length
    • 122” height
    • 75 mph topspeed
    • 100-160 mile range
    • 600 packages vs 450 packages
    • C-Series Vehicles feature a 100% composite monocoque body eliminating 4,000 lbs. of chassis and body weight compared to a conventional, internal combustion vehicle while carrying the same cargo volume and payload
    • 40 MPGe fuel efficiency for C-Series vs. 6 MPG for UPS
    • Reduced operating cost from ~$1.00/mile to ~$0.36/mile(1)
    • Workhorse states based on UPS data, customers would see a positive ROI within just 3 years when factoring in fuel, maintenance, and infrastructure costs.

UPS of course, has been acting as their partner in drone delivery testing for the Horsefly, their custom built, high-efficiency delivery UAV that is fully integrated with their line of electric delivery trucks.


  • Designed with a maximum gross weight of 30 lbs., the Horsefly carries a 10 lb. payload with a maximum air speed of 50 mph, and has the ability to automatically lower packages safely from 50 feet above
  • The HorseFly system is designed to conform to the FAA guidelines for UAV operation in the U.S.
  • The autonomous system is integrated with the C1000 Electric Delivery Vehicles. The truck is the jumping off point for the drone and then the pair will meet after the delivery is complete. The truck features a control center for the driver and auto-landing HorseFly roof with charging capabilities.
  • Recent updates to the drone allow for point-to-point package delivery without the need for a c1000
  • Reduces per package last-mile cost by up to 95% (~$0.04 per mile vs. ~$1.00 for gas vehicle)
  • The recently granted HorseFly™ patent covers any drone utilization integrated with conventional vehicle
  • COVID-19 accelerated e-commerce experimentation and adoption with contactless drone deliveries

Additional Projects

  • Metron: cloud-based, remote management system to manage and track the performance of all of the vehicle as a real-time solution for fleet managers
  • Aeres Delivery App – a custom HorseFly user control center. Location, updates, and real-time flight video are just some of the features.
  • W-15, an electric pickup prototype, sold to Lordstown for 10% equity stake
  • Surefly, an electric VTOL, sold to Moog $5million
  • Additionally, they entered a Joint Venture centered around the sharing and advancement of technology and IP related to the development of unmanned aerial systems (UAS).


Full Year 2020 (vs 2019)

Sales: $1.4m ($377k in 2019)

Cost of Goods sold: $13.1m ($5.8m in 2019)

General Expenses: $20.2m ($10.2m in 2019)

R&D Expenses: $9.1m ($8.2m in 2019)

Other Income: $321.1m ($15.8m in 2019) *THIS IS DUE TO THEIR EQUITY STAKE IN [RIDE]

Net Income: $69.8m (-$37.2m in 2019) **ONLY POSITIVE DUE TO OTHER INCOME

Additional Info:

  • 8,000 vehicle backlog including Pritchard Companies and Pride Group Enterprises. $600m+ in revenue.
  • Cash position of $215 million as of March 1, 2021
  • 10% strategic stake in Lordstown Motor Corp (RIDE) valued at nearly $180 million as of 3/25 that became liquid April 2021. Additionally, Workhorse will receive a royalty fee for each electric pickup truck delivered by Lordstown. (Should they actually make one.)
  • The global Electric Vehicles Market is expected to grow at a compound annual growth rate (CAGR) of 22% from 2019 to 2026”. Per FACTS & FACTORS
  • ARK forecasts that EV sales should increase roughly 20-fold from ~2.2 million in 2020 to 40 million units in 2025
  • ARK estimates that at some point during the next five years, drones will deliver more than 20% of parcel shipments.
  • ARK believes that drone delivery platforms will generate roughly $275 billion in delivery revenues, $50 billion in hardware sales, and $12 billion in mapping revenue by 2030.

Who’s In(vested)?

Institutional Ownership: 45.81% (Yahoo)

  • Blackrock (6.05%)
  • Vanguard (4.29%)
  • Ark Invest (3.24%) *** Yes Timmy, I know they unloaded their shares.
  • Robeco (3.22%)
  • Invesco (2.38%)


It is Workhorse’s expectation that the non-traditional OEMs will compete head-to-head with the likes of GM, Daimler and Ford in the sub 600 cubic feet class, while the 650 – 1200 cubic feet cargo capacity space is left largely ignored. The main reason being that vehicles over 10000 lbs require a Professional driver and costs associated with increase in skill required.

Workhorse is focused in BOTH the 650-1200 cubic feet range AND 10000lb+ gvw class.

I found that information hidden away in a scroll called a "10-k"

  • Traditional OEMs
    • Ford eTransit/GM EV600 both have 600 cubic feet cargo capacity or less. Late 2021 production.
    • Freightliner has both the ECascadia (class 8) and eM2 (class 6-7)
    • Mercedez-Benz ESprinter (Only 96 mile charge; Looking for 100+ in North America. Although Mercedez partnered with Matternet for drone optimization, the WKHS’s US patent should impair operations.)
  • Non-Traditional OEMs
    • Rivian (Amazon contract; 10,000 pounds or less)
    • Chanje v8100 (650 cubic feet cargo capacity)
    • Bollinger Deliver-E (Production set to begin 2022; no blue chip names announced)

SWOT Analysis

  • Strengths
    • Patents/Trademarks
    • All electric OEM (made in America)
    • Strong congressional support in OH
    • Already have actual product
  • Weaknesses
    • Historically poor production (prior management)
    • Low staff count (during COVID they didn’t have enough staff to assemble vehicles despite backlog of thousands of vehicles)
    • Connection to Steve Burns
  • Opportunities
    • Expected CAGR of both EVs and Drones over the next decade
    • 10% equity stake in RIDE (+ royalties on any future sales if they occur)
  • Threats
    • Never mass produced all electric C1000 or C650
    • EV market does not rapidly expand
    • Not a cash-positive company from direct operations

Conclusion + Position

  • My Position: 850 shares @ $13.89 average cost per share/$12.30 "adjusted" cost basis after selling covered calls Feb-April (message for screenshot if necessary; no problem!)
  • I originally discovered Workhorse digging through daily ARK invest movement emails. I found it interesting to see Cathie grabbing extraordinary amounts of shares in the company so I looked further into them. I was disappointed to see them exit their position but I have added an additional 200 shares to my portfolio since I found out.
  • Workhorse was probably way ahead of itself when it reached $40. That doesn't make it "Deadhorse" just because it missed out on one government contract. The government will need electrified fleets; Workhorse might stand a chance, who knows.
  • I miss flying my drone. I crashed it into a darn tree and ever since videos of the Horsefly on youtube have had to fill the void. Not the same, but it's like watching an airplane play Tetris.
  • I did not provide a list of catalysts – use the google machine

Exit Strategy

  • No.

Disclaimer: I am not a financial advisor

edit: format issues

edit2: format issues again

edit3: i think i fixed the format issues

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