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In the former situation, WKHS stock soars over the next few years as electric delivery vans become the industry norm. Without the USPS contract, Workhorse loses a lot of that visibility and potentially cedes market leadership to a competitor. With the USPS contract, Workhorse gains immense visibility to turn into the Tesla (NASDAQ: TSLA) of delivery vans. But, of course, it seems entirely likely that Workhorse blunders contributed to this delay.Īs doubts surrounding the USPS contract have grown in recent months, WKHS stock has plunged.
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USPS blamed the delay on “the current Covid-19 pandemic and its impact on Postal Service and supplier operations”. Those doubts received some credibility when, in October, USPS decided to delay its NGDV contract decision from October to December. But, multiple short-sellers like Hindenburg and Fuzzy Panda have recently cast doubt over Workhorse’s chances to win that contract, citing unnamed inside sources claiming that Workhorse’s trucks have not performed “up to par” during test trials with USPS. That contract - dubbed Next Generation Delivery Vehicles, or NGDV for short - is widely considered the biggest and most valuable contract in the electric delivery market.īroadly, whoever wins that contract will likely turn into the runaway leader in the burgeoning electric delivery space.įor months, Workhorse has been perceived by the market as the NGDV contract’s most likely winner, given Workhorse’s clear leadership in the electric delivery van market. Specifically, much of the hype surrounding Workhorse stock in 2020 has centered around the company winning a 165,000 unit, $8.1 billion contract with the Untied States Postal Service (or USPS). Over the past few months, some red flags have started to emerge with respect to the ostensibly compelling Workhorse growth narrative, and those red flags have, in sum, resulted in material weakness in WKHS stock. It has, to-date, been perceived as the best play on the electric delivery van megatrend. In short, the company already has a working electric delivery van, with market leading range and top-notch performance specs, that the company is actively delivering to some of the biggest customers in this space - like FedEx (NYSE: FDX), UPS (NYSE: UPS), Ryder (NYSE: R) and DHL - at the same time that most other companies in the market are still in the “concept” phase.Ĭonnecting the dots, then, it’s actually pretty easy to see why WKHS stock rose by 10X in 2020. Three, Workhorse has emerged as a clear leader in the electric delivery van space. Thus, over the next decade, the number of electric delivery vans in the world will grow by leaps and bounds, creating an multi-billion-dollar U.S. Less than 1% of fleet vehicles are electric today. fleet operators, at an average price of $50,000, for a total addressable market in the U.S. Over 350,000 last-mile delivery vans are purchased every year by U.S. Two, the electric disruption of the delivery van market represents an exceptionally compelling investment opportunity. And, perhaps most importantly, the technology and economics underlying electric vehicles has improved to a point where they are a viable and economically sensible alternative to gas-powered autos. Countries are implementing and sticking to legislature to decarbonize transportation.
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Businesses are committing to and doubling down on sustainability targets. One, it’s become crystal clear that electric is the future of transportation. WKHS stock has turned into one of the market’s favorite stocks in 2020 for a few reasons. Workhorse Stock: The Clear Leader in an Emerging Megatrend Indeed, most logical signs point to the fact that WKHS stock could soar 200% over the next few years. Naturally, if you were to listen to those guys, you’d easily walk away thinking WKHS stock is a screaming sell after its huge 2020 rally.īut the weight of evidence and data today suggests that the bear thesis will ultimately prove wrong here. Many notable short-sellers out there - like Hindenburg Research and Fuzzy Panda Research - see Workhorse as a wildly overhyped EV company, built on all hype and no substance, with a hyperextended valuation. Of course, the meteoric rally in WKHS stock has attracted the attention of multiple bears, pundits and critics. Until it became crystal clear that electric vehicles are the future of auto transportation, and Workhorse stock became investors’ favorite way to play the electrification wave in the delivery van vertical.Īt one point in September, WKHS was up a jaw-dropping 920% year-to-date. Electric delivery van maker Workhorse (NASDAQ: WKHS) was a relatively unknown company for years.