Electric van maker Workhorse Group Inc. (NASDAQ: WKHS) announced Monday morning that it had struck multiyear strategic agreements with Japan-based Hitachi subsidiaries Hitachi America and Hitachi Capital. The financial details of the agreements were not disclosed.
Workhouse, a maker of all-electric (EV) delivery vans aimed at the so-called last-mile sector, earlier this year received a $70 million investment that the company plans to use to speed-up its production ramp. When Workhorse reported results earlier in August, the company reaffirmed its production and delivery target of 300 to 400 vehicles in 2020.
EV makers from granddaddy Tesla Inc. (NASDAQ: TSLA) to Nio Ltd. (NYSE: NIO) and newbies Li Auto Inc. (NASDAQ: LI) and Xpeng Inc. (NYSE: XPEV) have enjoyed massive share price run-ups over the past year. Workhorse stock has risen by around 290% over the past 12 months, not quite as much as the 306% jump in Nikola Corp. (NASDAQ: NKLA). None can match Tesla’s booming gain of more than 880% though.
According to Monday’s announcement, Hitachi will assess Workhorse’s “manufacturing, operational and supply chain capabilities,” compare those to industry best practices and recommend ways for Workhorse to ramp its production. Hitachi Capital will help the van maker develop a national dealer network and provide financing for both dealers and customers.
Hicham Abdessamad, the chairperson of Hitachi America, said that the Japanese firm was “uniquely positioned in the growing commercial EV market with a set of innovative technologies and solutions to enable production capacity at scale.”
While it’s not clear just what Workhorse is giving up, it is pretty clear that getting financial backing for a dealer network and a financing arm is a big win. The tit-for-tat may come later as the “strategic agreements” turn into contracts.
Early Monday, Workhorse shares traded up more than 11%, at $18.28 in a 52-week range of $1.32 to $22.90. The consensus price target on the stock is $24.33.
Hitachi shares closed at $33.29 on Monday in Tokyo.