Meet President Trump's Favorite New Car Company, or Electric Truck Company, Up 200%

Cars and Drivers

Published: May 8, 2019 5:58 pm

Last Updated: January 30, 2020 9:01 pm

Presidential policies have helped certain companies and certain sectors almost every single presidential cycle in memory. Sometimes it’s just being in the right sector based on policy changes and directives, and sometimes it is just being the right company in the right place at the right time. But now there is something you haven’t likely seen occur before.

A small company named Workhorse Group Inc. (NASDAQ: WKHS) was the beneficiary of a tweet from the president on Wednesday. It may be a bit of an understatement to call it a beneficiary. Workhorse’s small market value and low share price allowed its mere mention to drive the shares up by 214% to $2.65 on more than 45 million shares trading in a single day.

As far as its business, Workhorse makes battery-electric vehicles and aircraft through its Automotive and Aviation divisions. This lineup of vehicles includes electric cargo vans and medium and light-duty pickup trucks, and the Aviation unit makes HorseFly delivery drones systems. Workhorse was founded in 2007 and was previously known as AMP prior to changing its name in April 2015.

The driving force behind the tweets is twofold. First, Workhorse appears to be in talks to acquire a shutdown Ohio factory from General Motors Co. (NYSE: GM). The second issue is that Workhorse appears to be a contender for an electric truck order from the U.S. Postal Service.

The president’s tweets said:

….in 3 separate locations, creating another 450 jobs. I have been working nicely with GM to get this done. Thank you to Mary B, your GREAT Governor, and Senator Rob Portman. With all the car companies coming back, and much more, THE USA IS BOOMING!

— Donald J. Trump (@realDonaldTrump) May 8, 2019

Before thinking that “the next government-sponsored Tesla of electric trucks” is being created without any checks here, note that Workhorse had a mere $763,173 in 2018 revenues and the company posted a net operating loss of $33.667 million with a net income applicable to shareholders of −$37.267 million. The company also ended 2018 with a tiny balance sheet of about $1.5 million in cash and total assets of $11.8 million. The company’s 2018 net tangible assets after backing out $27.22 million in liabilities was −$15.42 million.

The company’s earnings report was released just a day earlier, confirming a small capital raise that took place in April after securing $35 million in financing from Marathon Asset Management last December. Along with a more recent alliance with Duke Energy Corp. (NYSE: DUK), Workhorse’s post-earnings commentary noted that the company remains on schedule regarding the manufacturing of and delivery of the new N-GEN units, which should commence in the fourth quarter of this year.