In reporting its third quarter financial results, Workhorse Group Inc., makers of drone-integrated electric vehicles to the last-mile delivery sector, has lowered its production volume targets for 2020 and set a target for 2021 of 1,800 vehicles.
"Previously, we projected 300-400 vehicles to be produced by the end of 2020, mostly in the fourth quarter,” said Workhorse CEO Duane Hughes in a statement. “Although we will still manufacture and deliver vehicles in Q4, it will be a substantially lower amount than our previous guidance.”
In terms of causality, the company cited the inability of its primary battery supplier to meet volumes due to capacity issues and COVID-related slowdowns. Workhorse also said that more than 36% of its production-related staff is currently out with the virus or quarantined awaiting results.
The company has modified its assembly process, limited production support from third party sources, and delayed planned additions to our assembly staff.
"We view this as only a delay in our progress,” Hughes said. “We've introduced several new battery supplier options into our supply chain and will have supplemental volume additions in the first quarter of 2021.”
“While we cannot predict the full impact from COVID right now, let alone in 2021, when conditions improve and the coronavirus is no longer a business issue for us and our suppliers, then we would anticipate producing approximately 1,800 units in 2021," Hughes continued.
Sales for the third quarter of 2020 were recorded at $565,000 compared to $4,000 in the third quarter of 2019. Net loss was $84.1 million, compared with a net loss of $11.5 million in the third quarter of 2019. Operating income during the period was a loss of $9.8 million compared to a loss of $5.6 million in the third quarter of 2019.
In other highlights for the quarter, Workhorse received a purchase order for 500 C-1000 trucks from Pritchard Auto Company for its National Fleet Program and recorded additional sales orders from Fluid Systems and eTrucks LLC.
Workhorse received approval for the New York Truck Voucher Incentive Program (NYTVIP) to offer monetary vouchers for C-Series all-electric delivery vehicles in select New York State counties. The company also closed financing and converted existing notes into stock shares, which provided over $260 million in cash.
The company entered into an agreement with Hitachi Capital America to assist in developing a national dealer network and vehicle financing options for both dealers and customers, including dealer floorplan programs.