Would-be GM plant buyer Workhorse gets $25 million investment for delivery van production

Electric vehicle maker and prospective GM Lordstown plant buyer Workhorse has received $25 million in financing, which it will use for general working capital and backlog production of its N-Gen electric delivery van.

A private group of investors has received shares of Series B preferred stock and warrants to purchase common stock in exchange for the $25 million, Workhorse announced. The final $10 million of the investment was set to close Monday.

Workhorse’s release notes: “The proceeds will be used for general working capital and research and development, allowing the company to focus on finalizing the R&D associated with the N-GEN followed by production of the existing contracted backlog.”

After President Trump’s tweet about Workhorse buying the shuttered Lordstown, Ohio plant about a month ago, and GM’s subsequent announcement about being “in discussions” with Workhorse about the possible purchase, a later report cast some major doubt on the possibility.

That report revealed Workhorse was low on cash, and the unnamed Workhorse-related entity which would buy the GM plant was in need of $300 million to get the plant back up and running.

Beyond that, a filing noted that Workhorse needed $22 million to make vehicles for its customers, though the company did receive a $35 million line of credit.

This new funding will help with that backlog, at the very least, though full-bore production won’t start right away. Workhorse CEO Duane Hughes said in a statement,

“This funding provides Workhorse with sufficient capital to fully deliver on our existing backlog and will enable us to make significant strides in our strategic vision of being a leader in the electric last mile delivery space. We now have all necessary pieces in place to bridge Workhorse into full-scale N-GEN production and are looking forward to commencing the manufacturing process, in earnest, during the fourth quarter of this year.”

Electrek’s Take

Financing is and will continue to be the name of the game for Workhorse. This investment appears to be enough to get the company through its backlog of N-Gen orders. There’s also the possibility Workhorse gets a multi-billion dollar contract to supply delivery trucks to the USPS, which could conceivably change everything.

The deal with GM still appears to be far from a sure thing, though the right investors could come along on that end, as well.