What's up with electric-van start-up Workhorse Group (NASDAQ: WKHS) now that General Motors (GM 0.21%) has launched a whole new electric commercial-vehicle brand, called BrightStop, to compete in the same space? In this Motley Fool Live broadcast, recorded on Jan. 12, Industry Focus host Nick Sciple and Fool.com senior auto specialist John Rosevear took a look at this little Ohio company's prospects against the industry's giants.
A transcript is below.
Nick Sciple: A reader asks for our thoughts on Workhorse, ticker WKHS.
John Rosevear: Thoughts on Workhorse are, they have to be looking at GM's new announcement this morning, and becoming concerned. Okay back up, Workhorse is a small electric vehicle company in Ohio. They make, for the most part, electric commercial vans. They've been hoping to sell some to companies like UPS (UPS 0.07%), who they worked with a bit to develop their current model, which was certified for US sale over last summer, and they've been making them [in small numbers since].
They don't have the capacity to make tons and tons of vehicles, but they are ramping up to try. But I think it's really hard for a company like Workhorse to make a case that it's going to be a major player in a market that is dominated by Ford (F 1.44%) and GM. [A market] that Ford and GM are spending billions of dollars to continue to dominate amid the transition to electric vehicles. In fact, I wrote up the GM news this morning, and one of the last things I said was, "This is a big wake up call for Workhorse investors, or it should be." The company may still be able to carve out a niche, but they've got to be worried that Ford and GM have now both shown credible products that are coming to eat their lunch.
Nick Sciple: It's this idea that clearly whatever the addressable market is for this market is still significant. But it's that you've got these players that has historically dominated it that are making it a priority to maintain their share, or block off the opportunity that the Workhorse might have to capture significant amount of that.
