Please ensure Javascript is enabled for purposes of website accessibility

Why Workhorse Group Stock Is Rising Today

By John Rosevear – Aug 31, 2020 at 11:06AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company announced new strategic alliance aimed at helping it ramp up production.

What happened

Shares of Workhorse Group (WKHS 1.11%) are rising today, up 12.3% as of 10:30 a.m. EDT, after the maker of electric delivery vans announced a strategic deal with Japanese electronics giant Hitachi (HTHIF -2.43%) aimed at helping Workhorse execute its growth plan. 

So what

In a statement before the markets opened on Monday, Workhorse said that it has entered into "strategic agreements" with Hitachi's U.S. subsidiary, Hitachi America, and its financing arm, Hitachi Capital America Corporation. 

Under the deals, Hitachi America will assess Workhorse's manufacturing, supply chain, and other operational capabilities and provide recommendations to get them to best-in-class levels as Workhorse ramps up production of its new C-Series package-delivery vans. 

A red Workhorse C-650, an electric package-delivery van, parked in the driveway of a suburban house

Workhorse began production of its battery-electric C-Series vans earlier this year. Image source: Workhorse Group.

In addition, Hitachi Capital will help Workhorse build out a U.S. dealership network and will provide financing to both its customers and its new franchised dealers. 

Long story short: Workhorse is getting some help from a big player as it works to ramp up production and sales of its C-Series vans. That certainly seems bullish, and that's why auto investors were bidding up Workhorse's stock price on Monday morning. 

Now what

Both Workhorse and Hitachi said that the deal will allow Workhorse to benefit from Hitachi's expertise in electric vehicles and highly automated manufacturing, and to take advantage of the Japanese company's existing financing capabilities. Workhorse CEO Duane Hughes said that Hitachi Capital's involvement could help convince fleet operators to place orders. 

Hicham Abdessamad, Hitachi's U.S. chief, also noted that his company will help provide a charging network and digital tools to help Workhorse's commercial customers manage their fleets.

John Rosevear has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Workhorse Group Inc. Stock Quote
Workhorse Group Inc.
WKHS
$2.72 (1.11%) $0.03
Hitachi, Ltd. Stock Quote
Hitachi, Ltd.
HTHIF
$43.63 (-2.43%) $-1.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
327%
 
S&P 500 Returns
105%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.