Workhorse Group Inc., a provider of electric vehicles for the last-mile delivery sector, has secured $70 million in financial backing and plans to ramp up production, the firm said today.
Cincinnati-based Workhorse did not disclose the source of the funding, but said it was provided by “a single institutional investor” and that it planned to use the proceeds for current operating working capital and other general corporate purposes.
The company has previously provided vehicles for customers such as delivery giant UPS Inc., which purchased 125 hybrid electric delivery trucks in 2015 in an effort to cut fuel costs, and in 2018 deployed 50 more electrically powered package cars, saying their cost had come down to become comparable to conventionally fueled trucks without any subsidies.
"With this note in place, we have much greater financial flexibility to support our current and future production needs," Workhorse CEO Duane Hughes said in a release. "Heading into the second half of the year, we'll be looking to meet our previously stated annual delivery target, which should have us in a strong position to accelerate our production ramp into 2021. Successful vehicle production and delivery should also lead to additional orders as we demonstrate our ability to meet our current demand and provide road-ready last-mile delivery EVs."
The funding comes as electric car pioneer Tesla continues to hone its long-promised Tesla Semi, first launched in 2017 for initial sales in 2019 but now expected not to enter full production until 2021. Anticipation of that launch rose this week when a Tesla Semi was reportedly seen charging its battery, attached to a trailer load of the automaker’s Model 3s and Model Ys, according to published reports.
In the meantime, several rival electric car makers have begun to roll out mid-sized trucks, such as Daimler’s 2018 delivery of its Fuso e-Canter all-electric commercial vehicle to logistics customers in Europe, including Deutsche Post DHL Group, DB Schenker, Rhenus Logistics, and Dachser.
Worldwide, the adoption of battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles (FCVs) continues to grow, driven by declining costs from battery innovations and supportive government policies, according to Boulder, Colorado-based consulting firm Guidehouse Insights.
Despite that rising interest, the sector faces challenges around costs, limited model availability in certain vehicle classes, and gaps in charging infrastructure solutions. These challenges may be limiting in the near term, but they present opportunities for new competitors to establish a footprint in the future automotive market, the firm said in its report “Guidehouse Insights Leaderboard: EV Upstarts.”
Among electric vehicle providers, Rivian, NIO, and Nikola rank as the leading market players among a field of 21 electric vehicle “upstarts,” Guidehouse said. “Leading upstarts have distinguished themselves within the industry in a first mover capacity and have either deployed EVs or are near to deployment,” Scott Shepard, senior research analyst with Guidehouse, said in a release. “Rivian is a first mover in the North American pickup truck market and has secured significant partners and investors including Ford and Amazon, while NIO has produced the most vehicles of all competitors and has innovated solutions for battery swapping and mobile charging services. Nikola is the only competitor among those examined in this report looking to deploy both FCVs and BEVs.”
C Series vans left the factory in June for delivery. pic.twitter.com/2VRlIYpBBB— Workhorse (@Workhorse_Group) July 1, 2020