Workhorse Group Inc. (NASDAQ:WKHS) was a big mover, rallying by more than 10% after announcing a strategic partnership with Japan’s electronics giant Hitachi. Under the terms of the deal, the Japanese company is to assess the company‘s manufacturing supply chain and other operational capabilities. Likewise, it is expected to provide recommendations on the best way to improve them and ramp up productions of C-series package delivery vans.
Workhorse Group- Hitachi Partnership
Hitachi America has also committed to helping Workhorse Group develop a national dealer network as it looks to enhance the delivery of all-electric commercial vans. In addition, the Japanese company is to help customers in financing the vans. Hitachi is to help Workhorse Group develop a national dealer that will provide financing options for customers and franchised dealers.
The strategic partnership could not have come at a better time as Workhorse Group is looking to ramp up its consumer electric vans’ production and sale. The company is poised to benefit from Hitachi’s vast experience in the development of electric vehicles as well as highly automated manufacturing.
With Hitachi on board, there is a likelihood of fleet orders for Workhorse Group vans as the company is now well-positioned to ramp up production. Workhorse Group has already commenced work on the C-Series family of battery-electric package delivery vans. Some of the vans are to be made available to potential fleet customers via the Ryder Systems.
The stock rallied as investors reacted to the fact that Hitachi’s expertise in electric vehicle technology will be a valuable addition as it looks to address the strong demand for electric cars. The company will now be able to ramp up production to address the ever-growing demand for electric cars.
The partnership is also poised to drive customer orders, especially from the commercial leasing and finance industry. Workhorse Group has already received a purchase order for 20 C-100 trucks, having already delivered two C-1000 electric step vans. The company is aiming to produce and deliver 300 to 400 vehicles this year.