Workhorse Group Inc. WKHS shares are sinking to their lowest level in over a year after the company suspended deliveries of its C-1000 vehicles.
What Happened: The Cincinnati-based EV manufacturer said it has identified a number of enhancements in the production process and design of the C-1000 based on customer feedback related to vehicle dynamics. The company specifically intends to increase its payload capacity.
C-1000 is Workhorse's flagship standard range electric step van, which it began delivering to customers earlier this year after being in production for an extended period.
Following the unearthing of these enhancements and the company's review and redesign of the C-1000, it decided to suspend deliveries of C-1000 vehicles and recall 41 vehicles it has already delivered.
Workhorse noted that its leadership team has determined that additional testing and modifications to existing vehicles are required to certify the C-1000 vehicles under Federal Motor Vehicle Safety Standards.
The testing will likely be completed in the fourth quarter of 2021.
Workhorse said it intends to provide an update on its operating and commercial plans on its upcoming third-quarter earnings call.
"Our new leadership team is taking decisive and necessary actions as we conduct our comprehensive operational review of the business," said Workhorse CEO Rick Dauch.
The company also said it has filed a report with the National Highway Traffic Safety Administration regarding the need for additional testing and vehicle modifications to certify its C-1000 vehicles under FMVSS, and intends to fully coordinate with NHTSA.
Workhorse clarified that it has not received any customer reports of safety issues related to this matter in any of the C-1000 vehicles previously delivered.
Why It's Important: Workhorse hinted at issues with C-1000 in early August, when it announced it is planning to redesign the C-1000 truck.
Workhorse is facing several company-specific issues, including a SEC probe into the recording of fake preorders. The company is also accused of hiding the regulatory scrutiny from investors.
The company was previously engaged in a legal battle with the U.S. Postal Service over the latter's decision to award a mail truck contract to Oshkosh Corporation OSK. Last week, the company announced it is dropping the lawsuit.
WKHS Price Action: Workhorse shares were down 10.01% at $7.37 late Wednesday morning.
Related Link: Cramer Gives His Opinion On Raytheon, Workhorse Group And More
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
