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No, Workhorse hasn’t yet secured funding to buy GM’s Lordstown plant, but the deal is moving forward

For some time, Charged has followed the story of Workhorse Group, a Cincinnati-based company that has built a prototype electric pickup, has sold electric trucks to UPS and FedEx, and is in the running for a major contract to supply delivery trucks to the US Postal Service.

Along with other observers of the EV scene, we were excited about the news that Workhorse was involved in a plan to convert GM’s idled Lordstown, Ohio factory to an electric truck plant, but skeptical that a small company that was then on the verge of insolvency could arrange the financing to purchase the massive auto plant (to be precise, the plan is for the factory to be owned and operated by a newly-formed company using Workhorse’s technology and some of its key personnel).

The credibility of the scheme wasn’t enhanced by the fact that it was originally announced via a tweet from the White House, rather than by the companies involved. Last week, Vice President Mike Pence further muddied the waters when he prematurely announced that Workhorse had secured financing to buy the plant. In fact, as FreightWaves reported, GM and Lordstown Motors, the new company that will operate the plant, are still working through the due diligence phase.

Workhorse did raise $25 million in new funding in June, but this did not constitute financing for the Lordstown deal. GM told Green Car Reports that financing for the sale of the plant has not yet been secured, but that Workhorse will use the $25 million to fund R&D and to clear a backlog of commercial truck deliveries, putting the company in a stronger position to move forward with its Lordstown plans. “There’s been a lot of progress,” said GM spokesman Jim Cain. “Anything that makes Workhorse stronger, makes them stronger in the new company.”

Steve Burns, the founder of Workhorse and the CEO of Lordstown Motors, told The Detroit News that he’s seeking to raise $300 million to convert the assembly complex to an EV plant.

Last week, Ohio State Senators Sean O’Brien and Michael Rulli toured Workhorse’s Cincinnati headquarters, and came away “a lot more optimistic” about the Lordstown deal. The lawmakers test-drove both the pickup truck and the vehicle prototype that the company is pitching to USPS.

“They are very good quality vehicles with great acceleration, and they are very economical,” O’Brien said. “It was very reassuring to actually drive them.” Workhorse told O’Brien that the electric pickup will have a range of about 130 miles, and will cost approximately $52,000.

Workhorse CEO Duane Hughes and founder Steve Burns told the senators that the company plans to build the electric pickup trucks even if the USPS contract doesn’t come through. Hughes and Burns also made a commitment to use United Auto Workers employees at the new plant.

“As far as technology goes, they have it nailed down. But the elephant in the room is the financing,” Rulli said. “They told us they are on track to get the $350 million to $500 million needed to get into Lordstown. I can’t say the project is a home run yet because there are still unanswered questions, but I feel much more confident now.”

Source: Green Car Reports


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