Workhorse Group Secures $25M in Financing
CINCINNATI, Ohio — Workhorse Group Inc., the company eyeing a role in purchasing General Motors’ Lordstown complex, announced Monday it has secured $25 million in new financing from investors that would help the company ramp up production of its next generation electric vehicles.
The company said in a release that Workhorse closed on $15 million on May 31 and another $10 million this morning.
Under the terms of the agreement, investors acquired shares of Series B preferred stock in the company. The proceeds will be used for general working capital and research and development, which allows Workhorse to better focus on finalizing R&D related to its N-GEN electric vehicle.
“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,” Workhorse CEO Duane Hughes said in a statement.
“We now have all the 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,” Hughes said.
Workhorse, based in Loveland, Ohio, is among the partners in discussions with GM to purchase the vacant Lordstown plant, which ceased production of the Chevrolet Cruze on March 6. GM has placed the plant on “unallocated” status, meaning the company does not have a product lined up for the plant to produce.
Since 2017, GM has eliminated all three shifts at Lordstown, costing the Mahoning Valley more than 4,500 manufacturing jobs.
Workhorse manufactures electric trucks, vans and aircraft.
Under the proposal to GM, Workhorse would have a 5% interest in a new venture being assembled by the company’s founder and former CEO, Steve Burns. The name of the entity and potential other partners have not been identified as of yet. It is estimated that the venture would need to raise $300 million to buy the plant.
Officials have expressed caution related to the proposed deal, many citing that they don’t believe Workhorse had the financial muscle to purchase and operate a facility as large as GM Lordstown.
In a meeting with Ohio lawmakers in Washington last week, GM CEO Mary Barra said that GM entertained interest of more than a dozen other companies about the Lordstown plant, according to U.S. Sen. Sherrod Brown, D- Ohio. He said Barra told them that the Workhorse option appeared the most viable.
Copyright 2021 The Business Journal, Youngstown, Ohio.