What happened

After dropping as much as 10% today, shares of Workhorse Group (NASDAQ:WKHS) closed down only about 3.5%. But even a 10% drop doesn't move the needle of this electric delivery truck maker after shares are up an incredible 825% year to date.

WKHS Chart

WKHS data by YCharts

So what

Workhorse isn't the only company in the electric vehicle (EV) sector whose shares have been on a roll lately. Part of the attraction to Workhorse Group is the company is actually manufacturing a product. After a sharp rally in the entire sector, many of the stocks are starting to experience a pullback in share prices. 

electric delivery truck with drone overhead holding package

Image source: Getty Images.

Workhorse's niche is the "last mile" box truck for short-distance deliveries. Its two C-Series electric trucks offer 650 cubic feet or 1000 cubic feet of cargo space, and have 100 miles of range. The company is already manufacturing its trucks and has plans for an unmanned delivery drone, but its 2021 production volume target is still just 1,800 vehicles.

Now what

In its recent third-quarter earnings release, Workhorse CEO Duane Hughes guided investors to a "substantially lower amount" of vehicle production and delivery than previously thought through the remainder of 2020, mainly due to COVID-19 impacts.

It's difficult to value new companies in an emerging sector. The growing market for EVs will likely be huge. And niche players like Workhorse will most likely have some success. But the dramatic rise in its share price, and a price-to-sales ratio of over 3,000, would indicate there is room for this stock to drop. Investors looking to get into the EV sector should be aware of how highly valued some of the companies already are, including Workhorse Group. 

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