Lordstown (NASDAQ: RIDE) and Workhorse (NASDAQ: WKHS) Shares Continue To Rally During US Elections As Both Stocks Stand To Benefit Regardless of the Outcome

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Lordstown Motors (NASDAQ:RIDE), an American manufacturer of light-duty electric trucks, and its counterpart – the Workhorse Group (NASDAQ:WKHS) – are surfing mounting gains precipitated by the U.S. elections, as both stocks stand to benefit regardless of the victor.

For the uninitiated, Lordstown was launched in 2019 by Steve Burns, the former CEO of Workhorse. The company aims to manufacture its Endurance electric pickup truck at a refurbished General Motors facility. The Endurance, carrying an MSRP of $52,500 before the application of $7,500 in tax credits, can tow a load of up to 7,500 pounds by utilizing motors attached to all four wheels of the vehicle. While production is expected to commence only in 2021, the Endurance truck already boasts over 40,000 pre-orders. Moreover, it is aiming to increase the annual production capacity to 31,000 units by 2022. Recently, Lordstown closed its proposed merger with the Special Purpose Acquisition Company (SPAC), DiamondPeak, paving the way for the shares of the combined company to start trading on the stock exchange under the ticker symbol RIDE.

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For its part, Workhorse is currently retailing its C-Series electric delivery truck platform that will eventually be available in multiple size configurations, including 450, 650, and 1,000 cubic feet.

Lordstown and Workhorse shares often move in tandem due to the fact that the Workhorse Group owns a 10 percent stake in Lordstown. Moreover, the two companies share a number of synergies. As an illustration, Workhorse is expected to rely heavily on Lordstown’s technical expertise should it manage to secure a portion of the U.S. Postal Service’s (USPS) Next Generation Delivery Vehicle (NGDV) contract, meant to replace the aging fleet of USPS delivery vehicles. Expectations of Workhorse winning this contract has underpinned a substantial portion of the year-to-date rally in both stocks.

This brings us to the crux of the matter. Since the close on the 2nd of November, Lordstown shares have registered cumulative gains of around 33 percent, based on the current pre-market stock price of $17.38.

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Workhorse shares, on the other hand, have managed to eke out a more modest but still substantial cumulative gain of over 6.6 percent, based on the current pre-market share price of $17.08.

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So why are these two shares in general and Lordstown’s in particular rallying? Well, both of these stocks are currently situated in the proverbial Goldilocks zone, benefiting regardless of who ends up winning the race for the White House. As an illustration, President Trump has taken a personal interest in promoting made-in-America goods as well as ensuring job growth in Ohio and other mid-Western states. A sizable chunk of this growth is expected to be provided by Lordstown and Workhorse as these companies continue to ramp-up production capacity. In fact, a couple of weeks back, Lordstown’s Endurance electric pickup truck was even showcased on the lawns of the White House. Similarly, a Biden Presidency is viewed as being far more conscious of the environment which, in turn, will entail policy benefits for the entire EV sector, including indigenous players such as Lordstown and Workhorse.

Readers should note that Chinese EV stocks – including NIO (NYSE:NIO) and Xpeng (NYSE:XPEV) – have been rallying quite sharply as well. However, these stocks are somewhat more exposed to the incumbency factor where the hardline trade policy is seen as a headwind for these Asian EV players. Consequently, the best bet for investors currently, at least in the EV sphere, is to stick with Lordstown and Workhorse.

The author has no position in any of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.
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