Shares of electric commercial-van maker Workhorse Group (NASDAQ:WKHS) were trading higher on Tuesday, after the company announced that its new battery-electric delivery vans have been approved for U.S. sale.
As of 2:30 p.m. EDT, Workhorse's shares were up about 20% from Monday's closing price.
Workhorse said in a statement on Tuesday morning that its new C650 and C1000 electric delivery vans have successfully completed Federal Motor Vehicle Safety Standards (FMVSS) testing, meaning that the company is now approved to sell the vans in the United States.
For shareholders, this is welcome news. Earlier this year, before the COVID-19 outbreak, Workhorse had told auto investors to expect the new C-Series trucks to receive FMVSS approval by the end of the second quarter. But analysts and investors had since adjusted their expectations in light of the pandemic, hoping to see the trucks approved by the end of summer.
The fact that Workhorse was able to meet its original pre-pandemic guidance around the timing of the approvals is bullish. CEO Duane Hughes confirmed that the company is still on track to meet its production guidance for the remainder of 2020, and to sell between 300 and 400 vehicles this year.
With Federal approval in hand, Workhorse can now complete its preparations to begin manufacturing the new vans. The company will offer the C-Series vans in two sizes, with either 650 or 1000 cubic feet of cargo capacity. Buyers of both versions will be able to choose 35 kilowatt-hour (kWh) or 70 kWh battery packs. Vans with the larger battery pack will have a range of about 100 miles when fully loaded.
Workhorse is expected to begin sales of the C-Series vans through its partnership with Ryder System (NYSE:R) before the end of 2020.