Workhorse Group Inc (WKHS) – Short – Critical Failures in USPS NGDV Bid Revealed

Workhorse Report – Download Link

Workhorse’s USPS Bid has Numerous Critical Failures:

Executive Summary:

A few weeks ago, Hindenburg Research exposed Nikola, a high-flying EV company, as an alleged “intricate fraud”. The stock fell over 50% in the process. Nikola has since admitted to purposely rolling a truck down a hill to mask the appearance of a working prototype for a promo video… Workhorse rolled a USPS prototype truck down a hill accidently after their parking brake failed causing a union USPS driver to be hospitalized after jumping out of the runaway vehicle. We think this debacle as well as the numerous other “critical failures” we will lay out, destroyed Workhorse’s chances of ever landing the USPS NGDV award.

“The parking brake failed that [Workhorse] had designed & installed…the truck ran away, the USPS driver, an union member, had to jump out of the truck while it was moving. He was injured while jumping out of the truck…he was actually hospitalized. I think he broke his leg. The Post Office was very angry about this and it resulted in the USPS refusing to do anymore testing for several months”

~“A Knowledgeable Source” close to the VT Hackney-Workhorse USPS bid

Bulls continue to stand by the hopes that Workhorse will win the USPS (United States Postal Service) “NGDV” (Next Generation Development Vehicle) $6.3 billion contract and that will open a door to new business and lucrative contracts. We will lay out incontrovertible NEW evidence to end any speculation that Workhorse will be awarded any share of the USPS NGDV contract. We will also show that major customers shut the door on Workhorse long ago, erasing any mentions of Workhorse Partnerships from filings and media.

  • VT Hackney was the prime contract bidder in the VT Hackney-Workhorse USPS bid. We learned from Hackney’s parent company, ST Engineering, that they exited the bid for the USPS NGDV program in 2019 because any award would not be material.
  • A source revealed that VT Hackney-Workhorse prototypes had serious performance problems including numerous critical failures:
    • Some of the more notable failures were their EV prototype ran out of range and got stranded on a road; suspension broke when hitting railroad tracks; chassis performance problems; extensive door failures; safety belt failures; motor failures; ran out of power on multiple occasions; and the parking brake failure that injured a USPS employee was one of the last straws.
    • Workhorse destroyed the USPS relationship further once the USPS realized they were being consistently misinformed. Workhorse also occasionally misinformed their partner VT Hackney.
    • Workhorse was unable to handle all the work as a subcontractor, leading to poor quality products that missed deadlines. This resulted in VT Hackney needing to hire an additional subcontractor to help, Prefix.
    • Workhorse does not have the ability, machinery, or engineering talent to fulfill the USPS contract even if they somehow won.
  • Major customers like UPS have already moved on from Workhorse–UPS COMPLETELY removed any mention of Workhorse in all literature. The UPS contract now belongs almost exclusively to Workhorse competitor Arrival. Workhorse’s large UPS order is solely for on-demand fulfillment which UPS has not asked for in years.
  • Investigator Visits! Employees told us that NO purchase orders are currently being fulfilled. They referred to the only trucks in the plant as “Show Units” and “Prototypes.” We also discovered NO Automation; NO Assembly Lines; NO IP Protection and their employees even let us photograph their ENGINEthe engine is nonproprietary
  • Can Stock Promotion be a “Trade Secret?” Workhorse has a nefarious past working with stock promoters charged with fraud; nothing has changed as we uncovered an on-going scheme that now appear to have moved to YouTube. The 420+ videos spell out a pattern of deceptive practices. Workhorse and Lordstown management have supported the stock promotion by actively participating in interviews with the promoters
  • Even IF Workhorse wins the USPS bid, all the economics will go to Lordstown. A licensing agreement between Workhorse and Lordstown shows Lordstown to be a beneficiary of a manufacturing ROFR in the event Workhorse wins the USPS bid. The agreement implies Workhorse will have limited to no economics left and that it never had the capacity to manufacture vehicles in the first place. We also reveal just how unprofitable the trucks actually are… -631% estimated Gross Margins for parts alone.
  • Very little intellectual property – Workhorse only has two (old) EV patents, one drone patent, and five via Navistar that were previously written off as worthless. Lordstown Motors is even worse and has 0 IP and selected an underfunded Slovenia company for their mission critical hub motor.
    • Industry experts confirmed all our concerns and condemned the IP as worthless. They also pleaded with us not to invest in the company.
  • Who is Steve Burns? (Lordstown CEO & Workhorse Founder) Evaluating past deals we discover a CopyCat entrepreneur who mimics topical ideas, misleads investors, and has decades of destroying investor capital with the same web of individuals. Burns is NOT the next Elon Musk but certainly might be a much more nefarious version of Trevor Milton.
  • Enter Lordstown (Workhorse 2.0?) – USPS failures and the souring relationship led Stephen Burns to desperately piece together a deal for GM’s Lordstown facility moving the GM factory and W-15 (now Endurance) assets out of Workhorse.
  • Is anyone surprised the insiders are selling? The massive insider sales over recent months are the last perilous sign to investors of the inevitable collapse of the company.

Upcoming (Potential) Negative Catalysts:

  • Q3 & Q4 Revenue Miss of Wall Street estimates. Wall Street has Workhorse production ramping – we heard and saw first-hand that it wasn’t.
  • Lordstown’s SPAC merger doesn’t close or gets delayed once GM & new investors realize Steve Burns & Lordstown Motors has more red flags than Nikola will they still invest?
  • Most importantly, USPS is expected to announce the NGVP contract winner(s) by year-end. According to BTIG analysis, the WKHS downside is to $1 a share (down 95%+) if the USPS contract is lost. We agree and believe that downside will soon be reality.

We are short Workhorse Group.  The USPS is to set to announce the NGVP contract winner by year end and we prove WKHS has already lost.

Workhorse Final Report – Download Here

Workhorse Group showed us everything! They even let us photograph their supposed proprietary motors (which of course are made by someone else).