Workhorse’s (NASDAQ:WKHS) stock was up both Tuesday and Wednesday, but it really gained steam today. Today’s massive surge in WKHS stock is likely thanks to the current meme stock trading phenomenon. Shares of the electric van company finished Thursday up 28%, but still well below where it traded in February.
And it might be time to use the ongoing meme stock rally to take WKHS stock profits off the table and funnel them into a more promising EV company.
Despite the price surge, we believe Workhorse is the wrong company in the right market.
The right market is electric vans. There’s a huge potential upside in this market and the technology is already capable of meeting the market’s needs.
For last-mile delivery, electric vans don’t need the latest and greatest technology. They aren’t traveling long distances, so existing tech can already meet existing demand.
Long haul electric trucking is a ways off, but last-mile delivery vans will happen very soon.
The catch, at least as it pertains to Workhorse, is that the market is already super crowded.
And Workhorse is indistinguishable from its competition.
No Competitive Edge
If anything, Workhorse is distinguished in a bad way.
In February, we saw WKHS tank hard — nearly 50% — after the USPS surprised everyone by choosing Oshkosh (NYSE:OSK) over Workhorse for its 10-year fleet upgrade contract.
This is especially concerning because Biden, one month prior, directing “federal agencies to procure carbon pollution-free electricity and clean, zero-emission vehicles to create good-paying, union jobs and stimulate clean energy industries.”
The fact that the USPS ultimately favored Oshkosh, who isn’t even making electric vehicles, is a major slap in the face for Workhorse.
And maybe the final nail in the WKHS stock’s coffin.
USPS’s move basically says it has zero faith in Workhorse as a company.
This could be due to technological shortcomings. Or it could be due to its small production capacity.
Both are deal breakers.
There are some house lawmakers seeking to have the Biden administration , but we don’t see Workhorse thriving regardless of the outcome of a potential investigation.
The Bottom Line on WKHS stock
There are a lot of EV makers and a lot of electric vans.
Without the USPS deal that Workhorse thought it had in the bad, the company is hard-pressed to stand out from the crowd.
Last-mile delivery is where electric vehicles are best able to thrive at the present. And that’s exactly the market that Workhorse is in.
But Workhorse clearly lags behind competitors, if all the big EV van deals are landing elsewhere.
If you’re looking for an electric van stock we can recommend, take a look at Arrival (NASDAQG:ARVL).
(NYSE:UPS) to electrify its fleet last year, which sees the company delivering 10,000 vehicles to the delivery service over the next few years.
And it delivered a to UPS in April of this year that gave the company something to celebrate and the stock a nice boost.
And, if you’re also in the market for a competitor to EV giant Tesla (NASDAQ:TSLA), check out our recent recommendation.
But there are even better EV stocks out there than these, such as the companies I research and catalogue in my premiere research platform, Innovation Investor.
These stocks represent the cream-of-the-crop when it comes to disruptive technological innovation in EVs. Each of these next-generation mobility stocks could post Tesla-like returns, including a secret startup that’s spearheading the self-driving revolution, and a company I consider my EV “sleeper” stock of the decade.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this video.