Impressive Gains Will Go On If Workhorse Seals $6B USPS Contract

If you want to get in on the electric car boom with an affordable stock showing big growth, you’ll have to think outside the box. Or, more accurately, think about delivering the box: companies that focus on electric delivery vehicles like Workhouse Group (NASDAQ:WKHS). Even after gains of over 750% so far this year, WKHS stock is an affordable pick.

A Workhorse (WKHS) W-15 hybrid electric pickup truck on display at a branding event in Flatiron Plaza in New York.

Source: rblfmr /

In the running for a huge contract to supply electric delivery vehicles to the U.S. Postal Service — to the tune of $6 billion — WKHS stock may just be getting started.

Workhorse and the Electric Delivery Vehicle Race

Everyone knows the story of electric cars and the sudden acceleration in popularity that’s driving the stocks of electric car makers through the roof. Gas-powered cars aren’t going anywhere any time soon, but electric cars are finally going mainstream. There are even electric pickup trucks set to arrive in showrooms shortly.

For investors who want to get in on this boom, there are two issues. The first is that shares in these companies are becoming expensive. The second is the nagging feeling that battery-powered electric cars may not be the end game. Charging takes too long and range is limited.

Many consider battery-powered electric cars a stopgap solution, with hydrogen fuel cell-powered electric cars the real endgame for the future. They have significantly longer range, and a refill takes five minutes instead of an hour plus. The most hyped new electric pickup truck of 2020 actually offers a hydrogen fuel cell option that dramatically improves its driving range.

Workhorse Group produces battery-powered electric vehicles. However, Workhorse is focused on delivery fleets. The Workhorse C650 and C1000 vans are “built specifically for last mile delivery.” A lower range and longer refuelling time don’t present the same sort of challenges for this application. Delivery vans aren’t driving hundreds of miles between cities, and they can be plugged in and fully recharged overnight.

While hydrogen fuel cell technology may begin to make inroads in the consumer market and eventually displace battery tech, it’s a smaller threat when it comes to Workhorse’s target market.

The USPS Contract

Workhorse stock spent the first half of 2020 plodding along around $3, then suddenly shot up starting in June. By the end of June, WKHS stock had surpassed its all-time record highs. While there was a short drop-off in the first few weeks of July, WKHS resumed climbing. At this point, it’s trading above $26 and at time of writing, its gains for 2020 were nearly 765%.

The overall halo effect of investor enthusiasm for electric car stocks contributed to the big gains. Being added to the Russell 3000 Index certainly helped, as did landing $70 million in institutional funding. But the real catalyst for Workhorse has been the USPS.


The postal service is replacing its aging fleet of gas-powered delivery vehicles. It needs 140,000 new vans, and that contract is worth up to $6 billion. Postal duty — last mile delivery — is exactly what Workhorse Group’s electric delivery vans are designed for.  

At this point, several bidders for the contract have dropped out, and Workhorse is one of the three remaining finalists. One offers a plug-in hybrid, and the other a traditional gas-powered van. Workhorse Group is the only contender offering a pure, battery-powered electric solution. That means Workhorse vans have the advantage of lower maintenance costs, much lower fuel cost, zero emissions and no noise.

Bottom Line on WKHS Stock

Workhorse shares earn an ‘A’ rating in my Portfolio Grader. At $26 they are a relatively cheap play on battery-powered electric cars, but Workhorse Group’s focus on last-mile commercial delivery insulates it from the long-term threat hydrogen fuel technology poses to consumer electric car makers. If Workhorse lands that USPS contract? Besides the huge revenue boost, couriers and other delivery businesses are going to take notice. This year’s WKHS stock gains could be just the start.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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