Workhorse Group, Inc. (NASDAQ: WKHS) Q4 2020 earnings call dated Mar. 01, 2021
Corporate Participants:
Robert Willison — Chief Operating Officer
Steve Schrader — Chief Financial Officer
Duane Hughes — Chief Executive Officer and President
Analysts:
Gregory Lewis — BTIG — Analyst
Colin Rusch — Oppenheimer — Analyst
Craig Irwin — ROTH Capital Partners — Analyst
Michael Shlisky — Colliers Securities — Analyst
Jeffrey Osborne — Cowen & Co — Analyst
Craig Shere — Tuohy Brothers — Analyst
Presentation:
Operator
Ladies and gentlemen, greetings and welcome to Workhorse Group’s Fourth Quarter and Full Year 2020 Investor Conference Call. As a reminder, this conference call is being recorded.
It is now my pleasure to introduce your host, Workhorse’s Chief Operating Officer, Dr. Rob Willison. Thank you, Dr. Willison, you may begin.
Robert Willison — Chief Operating Officer
Thank you, operator and good morning everyone. We appreciate you taking the time to join us for our call. Before the market opened, we issued a press release with all our results for the fourth quarter and for the year ended December 31, 2020, a copy of which is in the Investor Relations section of our website. We also released our Form 10-K this morning.
I’m going to turn the call over to our CFO, Steve Schrader in a few moments and Steve will walk us through our financial results for the quarter and for the full year. After that, our CEO, Duane Hughes will give you an update on our business and provide an outlook for the year ahead.
But before we begin, I want to call your attention to our Safe Harbor provision for forward-looking statements that is posted on our website and as part of our quarterly update. The Safe Harbor provision identifies risk factors that may cause actual results to differ materially from the content of our forward-looking statements. Our 2020 Form 10-K and other periodic filings on file with the SEC provide further detail about the risk factors related to our business.
And with that, I would like to turn the call over to our CFO, Steve Schrader. Steve?
Steve Schrader — Chief Financial Officer
Thanks, Rob, and thank you to all who are joining us for today’s call. This morning we issued a press release which discusses the results of our operations for the quarter. Additionally, as Rob just mentioned, our Form 10-K was also filed today. I recommend you going through both materials to get more color on some of the information being discussed today.
Now to our financial results for the fourth quarter and full year ended December 31, 2020. Sales for the fourth quarter of 2020 recorded at $652,000 compared with $3,000 in the fourth quarter of 2019. For the full year, sales were $1.4 million compared to $377,000 in 2019. Increase in sales for both the quarter and the year was due to a higher volume of trucks produced and delivered.
Cost of goods sold increased to $7 million from $2.1 million in the fourth quarter of 2019. For the full year, cost of goods sold was $13.1 million compared to $5.8 million in 2019. The increase was primarily due to a higher volume of trucks produced, as well as increased production payroll and warranty expenses.
Selling, general and administrative expenses increased to $4.7 million from $3.6 million in the same period last year. The increase was attributable to higher incentive stock compensation and consulting costs. For the full year, SG&A expenses were $20.2 million compared to $10.2 million in 2019. The increase in SG&A expenses was attributable to higher consulting costs and employee compensation.
Research and development expenses were $4 million which was consistent from $4 million in the same period last year. For the full year, R&D expenses were $9.2 million compared to $8.2 million in 2019. The increase in R&D expenses for the full year was due to contract labor increases and prototype development expenses.
Other income increased to $322.2 million from $15.8 million in the fourth quarter of 2019. For the year, Other income increased to $323.1 million from $15.8 million in 2019. The increase was primarily related to an increase in the fair value of our investment in Lordstown Motors, which was valued at $330 million on December 31, 2020.
Interest expense net decreased to $4.9 million in the fourth quarter compared to $5.6 million from the same period last year. The decrease in interest expenses was primarily related to the decrease in the fair value of the company’s convertible notes. For the full year, interest expense, net was $190.5 million compared to $29.1 million in 2019. The increase was primarily related to a non-cash change in fair value of the company’s convertible notes as a result of an increase in stock price throughout the course of 2020.
Net income in Q4, 2020, was $280.5 million compared with a net income of $655,000 in the fourth quarter of 2019. For the full year, we had net income of $69.8 million compared to a net loss of $37.2 million in 2019. While our increased production efforts will likely cause our go-forward quarterly results to fluctuate, we look to build a long-term economically environmental sustainable organization.
As of today’s call, we have approximately $250 million in cash on our balance sheet. Over the course of 12 months, Workhorse’s finance team has executed various agreements to strengthen our balance sheet. Through several capital raises, we have been able to improve our liquidity. This capital infusion represents a greater total amount than our combined fundraising efforts since inception, which speaks to the progress we made over the years, translating to market acceptance and also provides us with the stability and resources to execute on our long-term production goals.
While we will continue to focus on building trucks to meet our backlog of orders, we will also evaluate the most efficient and responsible fundraising opportunities to support this mission.
This year we increased our Investor Relations effort by conducting over 200 one-on-one meetings and taking part in six investor conferences and totaled more than 800 attendees from institutional firms. This is the first time we’ve concentrated our Investor Relations beyond equity dealerships [Phonetic].
That completes my financial overview. I’ll now turn the call over to Duane to discuss operations and outlook. Duane?
Duane Hughes — Chief Executive Officer and President
Thanks, Steve, and good morning to everyone on the call. We appreciate you taking the time to join us today.
To start, I’d like to take a minute to directly address something that’s been top of mind for us, as well as many of you listening today. I’m speaking, of course, about the United States Postal Service Next Generation Delivery Vehicle or USPS NGDV program. As many of you are well aware, last Tuesday, the postal service issued a press release announcing that it made an award under the NGDV contract to a competing finalist. This was not the result we had anticipated or hoped for and we appreciate the interest of the many stakeholders who have reached out to better understand the decision-making process, as well as any potential next steps.
What I am able to share with you today is that we have requested, pursuant to the publicly-provided bid process rules, additional information from the U.S. Postal Service and have scheduled a face-to-face meeting with the postal Service on March 3. We understand that many people want answers and information in a timely manner and we will continue to work with the postal service according to the terms of our engagement as we move forward. To be clear, we intend to explore all avenues that are available to us. We appreciate your patience in the meantime as we allow this process to work through its proper course.
Now I’d like to get into updates from our operations, beginning with a brief look back this past year. The past 12 months have been a remarkable period for our company and for the world at large. Let me highlight a few items we have been keenly focused on in 2020. We raised $270 million in capital, transforming our balance sheet and giving us the capital to build the trucks in our backlog. We made significant improvements and additions to our leadership team; our Board of Directors and our overall headcount to support production. We achieved sought-after and required certifications with both federal and state regulators, ensuring that our vehicles can be sold in the U.S. and now Canada.
Production readiness; we announced major strategic partnerships designed to expand our production capabilities and sales reach by adding boots on the ground with consultants, proven advisors and full-time employees to achieve our goals. We announced several new customer agreements, allowing us to increase our backlog seven fold over the last year.
We made tremendous progress with our HorseFly autonomous delivery drone and participated in test deliveries with UPS and others that will ultimately impact the way we deliver packages, medical supplies, and other goods in our new more distanced world. We were approved for the rigorous FAA Type Certification process.
Needless to say, it’s been an incredible year for us and I’m both proud and grateful for the efforts of our employees who continue to dedicate themselves to our mission of changing last-mile delivery even in the face of a pandemic.
As noted on our last call, in November, our operations were unfortunately impacted by COVID-19 outbreak among our staff. Over the period of October 26, 2020 to January 29, 2021, we partnered with the Hamilton County Health Department to contact-trace more than 30 confirmed cases of COVID-19. As a result, we were able to safely manage our employees and contractors, and get them back into the workplace. We significantly enhanced our daily cleaning and personal protection habits following all recommended CDC and local health department guidelines. In addition, we also participated in a webinar offered by the health department to ensure we had shored up any areas for improvement. Here again, we worked daily on protocols, creating a safe environment for our employees and outside individuals.
On January 28 of this year, we received a letter from the Hamilton County Health Department informing us that due to no new positive cases booked for two full incubation cycles, they would be closing our case. I’m pleased to share that in the six weeks since receiving this letter, we have had only one new positive case of COVID-19. As of today, while we believe we are past these issues that were presented by the virus, we are still continuing to take all appropriate measures following state and federal guidelines, including self monitoring, taking temperatures, mask wearing, social distancing and routine hand-washing and are adding further procedures as we adapt to this ever changing environment. These measures include increasing our professional sterilization and disinfection services as part of our daily janitorial services throughout the day.
In the face of these new hurdles, we still continued to make progress on the recruiting front as well. Our large-scale manufacturing plan requires we rapidly increase our workforce to support these efforts. In November 2020, we had roughly 90 employees. Today, we have almost doubled our employee count to 170 strong, which has been augmented by third-party services, such as Hitachi and Belcan, in addition to our internal hiring efforts. All told, we are 200-plus people strong.
Another necessary but important step in our plan to reach scaled production is on the regulatory front. In 2020, we were able to successfully navigate through the U.S. Environmental Protection Agency and the California Air Resource Board for our 2021 Series — C Series vehicles. Our C Series vehicles, like the vehicles from any commercial EV operator, have to pass a number of regulatory hurdles, both on a state and federal level, in order to operate on U.S. and Canadian roads. These certifications, while all meaningful in their own right, represent a significant undertaking on the part of the applicant. Having completed all requirements for nationwide sales and road readiness, we believe our current standing has us firmly in an early leadership position.
In July and October, we also received multiple executive orders from the California Air Resource Board respectively designating different C Series models as zero-emission vehicles in the State of California. Combined with our Certificate of Conformity from the EPA in March, our Federal Motor Vehicle Safety Standard certifications in June, we were the first medium-duty battery electric vehicle OEM to receive approvals from both the EPA, as well as CARB.
During the executive order testing process, our C-1000 Extended Range achieved an urban driving average of nearly 160 miles and an urban highway blended driving range of 149 miles per charge. Obtaining an executive order was only one of the preliminary requirements in order to be considered for the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, also known as HVIP, which we also successfully entered in late July. With our eligibility into the program confirmed, Workhorse’s C Series battery electric step vans are eligible for monetary vouchers of up to $45,000 per vehicle. Workhorse is also eligible to receive 2.07 Zero-Emission Vehicle credits for these models. ZEV credits can be sold to other original equipment manufacturers to help them meet CARB emission standards. Our eligibility for the HVIP program is expected to help dramatically reduce purchasing cost for California-based potential customers.
In October, we also received approval from the New York Truck Voucher Incentive Program to offer vouchers for our C Series battery electric delivery vans of up to $48,328. In support of our greater production efforts, we made meaningful progress on the sales front over the past few months, which has provided us with additional visibility into our production ramp going forward. Thanks to our efforts and expanding our sales channels through dealer networks and other distributors, as well as our attractive financing plans supported by Hitachi, we were able to increase our order backlog from 1,100 units to just over 8,000 units.
In November, Pritchard Companies placed a 500 unit order for our C-1000 electric delivery vans, while the Pride Group, headquartered in Canada, most recently placed a 6,320 unit order that includes both C-1000 and C-650 electric vehicles. Combined, the total value of these two purchases equates to over $600 million in sales. We expect the first deliveries to Pride customers by as early as July of this year.
In addition, we have forged a close working relationship with Hitachi’s mobility strategy team to develop and expand our dealer sales and support network. HCA has been assisting Workhorse in strengthening a national dealer network and supporting our sales with vehicle financing options for both dealers and fleet customers, including dealer floor plans. We are also benefiting from their manufacturing expertise to further increase our channel sales capacity, along with our assembly and manufacturing process.
With that update completed, I’ll now get into operations and our vehicle assembly progress. Limited production of C Series vehicles continued in both the fourth quarter of 2020 and the first quarter of 2021. Units were delivered to our premier customer base, including Pritchard automotive companies, and to one of our newer customers, an international home and office retailer, which we were able to garner through our dealer network relationship with Fluid Trucks.
I’d like to spend a few minutes to talk about Pritchard. Not only have they committed to purchasing 500 vehicles, but they are also playing a key role in creating efficient and cost effective distribution channels for us. Pritchard provides Workhorse with transportation services of our finished vehicles in Union City to a Pritchard Update Center in Ottawa, Ohio, where they install value added products such as custom shelving and racking, vehicle wraps, and passive safety systems like 360 degree camera systems. Their custom-built low-void trailers can transport two Workhorse C-1000 vehicles at the same time, which effectively cuts our transport costs in half.
Furthermore, Pritchard is assisting with our branding and marketing efforts as reflected by our current engagement through the Purpose Built National Campaign that started in Tampa, Florida at the Super Bowl and is planning to continue over the next several months through more than 20 major cities in the U.S. The mission is to bring awareness to companies and cities about the electric vehicle revolution, how it can help reduce greenhouse gas emissions, and how to create a structure that supports a city’s evolution towards electrification, which is aligned with the current administration’s support to the EV industry.
We could not be happier with this strategic relationship as it allows Workhorse to focus on scaling the production of our electric vehicles, while Pritchard handles the variability of individual customer needs, as well as the effective distribution of such vehicles throughout North America.
During our last call, we also addressed a supply chain constraint with battery packs and the inability for the current supplier to keep up with the volume requirements. We have addressed this issue in multiple ways, which includes working with our current supplier to overcome the supply constraints earlier identified. We have also collaborated with an additional supplier to further expand our battery pack options. Assuming testing validates our expectations, deliveries with the new packs are set to begin in the second quarter.
We are also working to enter long-term agreements with key suppliers, enabling us to overcome the challenges presented by small volume spot buys and expedited shipments that are sometimes needed for a company just starting production. We have discussed our target of 1,800 units for the year and we are well focused on the requirements needed to make it happen. But we are facing various supply chain challenges, both internal and external, in the ramp-up to that goal. While we believe this is a feasible goal, it’s a stretch but given our backlog, we cannot sacrifice future build volume for current year production, and scaling up manufacturing properly has to take precedence.
As of today, we have completed the set up of the initial assembly operation and are using roughly 33% of the plant capacity or the 33% of the total line available to support it. This encompasses much more than basic assembly station set up. We have new hires in place to support the growing volume of daily vehicle production and have upgraded the assembly equipment on the line to make the manufacturing process even more efficient.
Next, during the fourth quarter of 2020 and the first quarter of 2021, we continue to work closely with our partners, Hitachi and Belcan. The focus of the Hitachi engagement, following their operations assessment last year, is to accelerate the progression of Workhorse’s factory from an R&D concept to a world-class manufacturer of last mile mobility solutions. With Hitachi’s 110 years of manufacturing expertise, ours over 60 years of IT leadership, we have made progress on the production front. In addition, Hitachi and Workhorse intend to partner on charging infrastructure capabilities through the Hitachi ABB Power Grids eMotion suite of solutions and obtaining Workhorse customers through holistic EV solutions and accelerating our journey of EV adoption.
Our Hitachi partnership has also already yielded considerable results through the dealer development and vehicle purchase finance contracts awarded to Workhorse through Hitachi Capital America’s fleet and dealer partners. We have taken the partnership a step further and have forged a close working relationship with Hitachi’s mobility strategy team to develop and expand on our dealer sales and support network.
Next, I’d like to quickly touch on gross margin expectations. 2021 is our first year of scaled production, and as with nearly every manufacturing company, whether they are spending on R&D or installing equipment, the transition to manufacturing usually results in negative gross margins for a lengthy period, and we are no exception. As I mentioned earlier, during our battery supplier discussion, we have a roadmap to lower our material cost through competitive sourcing, engineering improvements and adding automation to the assembly line. But it will take time to achieve. Therefore, it is fair expectation to expect substantial negative gross margins for 2021.
Our engineering team has continued the development of the C Series platform as we identify enhancements and change requests from our blue-chip customer base. Our research and development activity has focused on improving the new model year C Series, including enhancements needed to support production assembly efficiency, material component availability, cost reduction and customer feedback. These new revisions incorporate an aluminum skateboard chassis, which improves the options we have to expand our production capabilities, and our sales growth through expanded channels that include specialty body builders and other third-party outfitters.
In addition to the headcount previously discussed, we also added three new members to the executive team. First, John Graber, who leads the development of the HorseFly program. Second, as announced via press release last month, we also brought on Chris Nordh as our new Vice President of Commercial Development. Chris comes to us from Ryder, one of our major sales and maintenance partners, where he was Senior Director of Advanced Vehicle Technology & Energy Products. In his new role, Chris will be focused on augmenting and expanding Workhorse’s sales and support infrastructure. He brings deep advanced technology vehicle experience and will be invaluable as we continue to build production of our C Series all-electric vehicles and expand our reach into new markets. And, third is our new Human Resources Director, Susan Pelley. Susan has already established herself as a valuable member of the leadership team, particularly with our emphasis on quality and quantity of new hires.
I’d now like to provide an update on our newly monikered Aerospace division and HorseFly drone business. Safe, reliable and efficient operations drive everything we do in the last-mile space. Reducing or eliminating fossil fuels in package delivery is important, but just as important is matching the total energy expended to only that which is required to do the job.
As part of our last-mile solution set, four years ago, Workhorse started developing the HorseFly delivery system. HorseFly includes a small unmanned aerial vehicle, a ground control station, customer interfaces and a sophisticated integration system that allows our aircraft to operate indefinitely from our package delivery trucks. Our HorseFly system is a joint venture with Moog Incorporated through a jointly-owned enterprise called Service. Moog has decades of experience in autonomous operations, high reliability systems, electrification, FAA certification and safety. Our teams work closely with Moog to accelerate our progress in the last-mile space. In 2020, we delivered thousands of packages in tests and demonstrations. Working with the State of Virginia and UPS, we demonstrated how drones can fly, stand off low-touch deliveries during a pandemic, getting critical material where it needs to be, without endangering the people who have to deliver and use it.
We also worked with a major international package delivery company demonstrating the safety and reliability of our ground control station, our winch delivery systems and our aircraft. We demonstrated a system that autonomously flies from a delivery truck to a place of the customer’s choosing up to five miles away, delivers a meaningful payload, then automatically returns to the truck for another delivery. And our system delivers time after time after time, designed for the heavy-duty cycles logistics organizations demand. In the last 12 months, our team more than doubled in size and our accomplishments grew as the team did. We delivered two HorseFly units and Workhorse trucks with converted rooftops to accommodate the HorseFly for UPS. We performed our first commercial training for the crews of a major package delivery company, training both flight and maintenance personnel to use our systems.
And we entered the Federal Aviation Administration’s pipeline for certification of our HorseFly system. Though this is a new process for the FAA and the industry, we anticipate completing certification in the next 18 months. The FAA prioritizes drone development through what is called the BEYOND program. The state of North Dakota is a participant in BEYOND and we have joined with North Dakota as a partner in their BEYOND program.
We expect our work in the Northern Plains test sites to accelerate our work in expanding how our systems can work and where they will be allowed to operate. Verizon’s CEO Hans Vestberg gave the virtual keynote address at January’s Consumer Electronics Show where Workhorse and HorseFly figured prominently in that address. Our package delivery trucks were shown in UPS colors, our HorseFly delivery drone, also in UPS colors, delivered packages out of our patented truck-top delivery system. Workhorse Aerospace exists to enable our customers to safely, reliably and autonomously fly a practical payload a meaningful distance, making the entire delivery process a more effective and efficient process.
In 2021, we will build more aircraft systems than we’ve ever built before. Our plan calls for FAA flight testing in various climates and geographies. We’ll lock the designs of our hardware, firmware and software. In 2020, we created the conditions for providing safe, reliable aerial package delivery. In 2021, we’ll start actually doing it in service to the public.
That concludes my prepared remarks. Thank you all for your time this morning. We look forward to updating you on our progress going forward.
And we’re now ready to open the call for your questions. Operator, please provide the appropriate instructions.
Questions and Answers:
Operator
Thank you. [Operator Instructions] Our first question comes from the line of Greg Lewis with BTIG. Please proceed with your question.
Gregory Lewis — BTIG — Analyst
Yes, thank you and good morning, everybody. Steve, thank you for — and Duane, thank you for some of the comments. I was hoping you could kind of dive in a little bit more around production. It sounds like Q1 is going to look a lot like Q4 or close to it. If you could kind of walk through how we should be thinking about maybe the next few months and realizing that Belcan has been there, but I believe that’s wrapping up. Kind of, how should we be thinking about production as we kind of move forward here over the next few few months and few quarters?
Steve Schrader — Chief Financial Officer
Yeah, Greg, thanks for the question. I think from a production standpoint, I think you’re kind of right on what we just said. From a standpoint of — and part of it is trying to do two things at one time, Greg. We’re trying to actually get trucks out the door right now, but also set up the systems long term, like you mentioned, with our partners, Hitachi and Belcan, that we can fulfill our backlog of orders going forward. So having said that, I think the expectations should be we’re trying to get to a target of three a day some time here in this month and then also we kind of will continue to keep out our 10 a day by the end of sometime in June or by the end of the second quarter. So that’s kind of our goal I think from a standpoint of where we’re at right now. We’ve already got some — we had some trucks out the door and we’ll get more out here in March. And — but that’s where we stand with productions.
Duane Hughes — Chief Executive Officer and President
I would add — Greg, I would add to that is what Steve said is the real key here is making sure that as we head forward, that we have all the appropriate production systems in place, as well as equipment, but primarily the systems and processes that allow us to make jumps from three to 10 and 10 and more, going into the future, again, as Steve said, to complete our current backlog and our growing backlog as we move forward. So when we had our slowdown, I’ll say, in the fourth quarter due to COVID, we looked at what can we do beyond just sitting here waiting for employees to be able to come back to work. So we kind of picked up the pace of what we’re doing with the Hitachi team and developing the systems and the processes so that we can more quickly grow our per day units than perhaps we would have, had we just been using that brute force method of getting trucks out the door.
Gregory Lewis — BTIG — Analyst
Okay, great. And then another question, I wanted to pivot a little bit around incentives and I believe some of your customers are kind of waiting for some of these incentive structures to kind of take hold in some of these states like California, where I believe some of your customers are looking to take some first deliveries of some of their vehicles. Could you talk a little bit about how some of these state incentive structures are looking and when we think about them potentially being funded so that as production starts to ramp up here over the next, call it, couple of quarters, how we should think about where we are in the process from the states in terms of being able to actually fund some of these incentives?
Duane Hughes — Chief Executive Officer and President
Yeah. A few questions there, Greg, and this is Duane. I would tell you, first and foremost, our plan going forward particularly through our sales channels partners, not just Hitachi and Pride and Prichard, but beyond, right, is the ability to provide a price point of these trucks that they actually ROI very quickly in three years or less, and then provide that significant total cost of ownership savings, giving us the opportunity, right, to sell more trucks without requiring voucher programs. But to your point, in states that have voucher programs, I mentioned during the talk that California and the C-1000 as much as $45,000, where we can take advantage of that and increase the number of units we’re delivering in California in this case. I’m sure there will be fleets who want to take advantage of that.
To me, and from what I understand is that program will be or is anticipated to be funding in the second half of this year. So we are doing — we’re making concerted efforts at using our sales channels partners to find those customers that aren’t necessarily in a voucher state where we can deliver these vehicles without requiring that voucher program, which is what you’re seeing in the 8,000 backlog now and what you’ll see in the future as we continue to add new customers. I should say this, right, one of the things that you’ve seen over the last few months is our expansion of the customer base.
Rather than relying on one or two or maybe three of the largest logistics last-mile companies out there, we are now working through channels that allow us to reach, let’s call them, some of the smaller fleets, but also the largest fleets across multiple countries. So we’re really paying attention to how this voucher money is coming about, how it’s being competed for against the COVID pandemic, the things that are slowing it down and how we can address that market without requiring the vouchers.
Gregory Lewis — BTIG — Analyst
Okay, perfect. Hey, gentlemen, thank you very much for the time.
Duane Hughes — Chief Executive Officer and President
Great job.
Steve Schrader — Chief Financial Officer
Thank you, Greg.
Operator
Our next question comes from the line of Colin Rusch with Oppenheimer. Please proceed with your questions.
Colin Rusch — Oppenheimer — Analyst
Thanks so much, guys. Can we just give a little bit more detail about some of the elements in the supply chain that are proving cumbersome for you guys. Wanted just to get a sense of how much of a bottleneck that might be on a go-forward basis. That sounds better than cumbersome [Phonetic].
Duane Hughes — Chief Executive Officer and President
Yeah, I think what I said during my talking points where we are talking about the external supply chain-related issues, one is a very common, where we note about — that’s affected all other OEMs, right, being a microchip piece, right, that’s impacted a couple of segments, whether it’s steering racks, or body control modules, things like that; obviously, the components that need microchips. Now we’ve done a good job now of finding additional sources to alleviate or overcome those shortages, but then I also talked about those internal hurdles and those internal hurdles I already spoke about that relate back to putting systems and processes in place in the plant to allow us to, I’ll say, speed up our ability to move to larger number of units per day.
And so while there’s components out there and, in some cases, not much visibility in those components, some of the ones that you know about, again, like the microchip and so on, have impacted us. But again because of our limited volumes today, right, we can continue to get trucks out. We don’t have to shut everything down, but we’re looking for the ability that once we have the systems and processes in place to more quickly adjust to the ability to build trucks without dealing with — without having to deal with supply chain-related issues.
Colin Rusch — Oppenheimer — Analyst
Excellent. And then just in terms of the sales process. Obviously, there has been a handful of announcements from some larger OEMs, moving into the delivery van space. But can you talk a little bit about some of the sales dynamics in terms of time to actually contracting volumes, some of the discussions around pricing, now that there’s just a bit more competition in the space?
Duane Hughes — Chief Executive Officer and President
Yeah, I think that’s a great question, Colin. And I would tell you multiple things out. You heard me talk about our, I’m going to call it, our Purpose Built National Tour that, starting in February with the Super Bowl, is scheduled to roll through 20 different cities with our partner Pritchard, who are taking two Workhorse C-1000s to these cities and doing different campaigns throughout those cities, everywhere from — I think they’re in Charlotte right now, they’ll be in Minneapolis later this week. They’ll move to Cincinnati, DC, California and so on. Right? That is one way we’re able to get the message out with a demonstrable proof-of-performance concept, actually delivering product, delivering products from partners, that if you go back and see a few of the videos that were out there, you will see how that campaign is able to, I’ll say, bring the Workhorse name more awareness, what we do in this last-mile delivery segment.
The other piece is the differentiators of the vehicles themselves, which really help sell a vehicle to, in our case, last-mile delivery fleets. And those are differentiators, you heard me talk about a bunch of times, whether it’s the low floor, the performance of the vehicle itself, the mileage, but as importantly is the HorseFly delivery drone, right, the ability for us to further reduce the total cost of ownership by augmenting the electric vehicle with the electric delivery drone that allows these fleets to, A, differentiate themselves, reduce their cost and ultimately give them an opportunity to grow their market share because they are expanding upon the technology tools that are available to them to meet the ever demanding need the consumers want, which is product more quickly delivered to them at a more carbon-friendly and reduced cost capability.
Colin Rusch — Oppenheimer — Analyst
Great, thanks so much, guys.
Duane Hughes — Chief Executive Officer and President
Thank you, Colin.
Operator
Our next question comes from the line of Craig Irwin with ROTH Capital Partners. Please proceed with your question.
Craig Irwin — ROTH Capital Partners — Analyst
Hey, good morning and thanks for taking my questions. So President Biden has been pretty straightforward out there about his priorities particularly in having the federal fleet convert over to electric vehicles over the next several years. Most of the federal agencies have to go through OMB when they have big capital programs or big policies that are up for regular reinstatement publishing in the federal register. It seems the Postmaster General has a slightly different situation where he is not really accountable to the president the way that others are in the other federal agencies, given the Post Office has to file a 10-K and he answers to a Board. Can you maybe talk a little bit about the line of accountability in the Post Office as far as following federal rules and the line of accountability as far as following presidential priorities? Any comments there would be really helpful.
Duane Hughes — Chief Executive Officer and President
I’m not — I probably can’t speak as deeply as others can to this. But to your point, the Postmaster General reports to a Board of Governors. And that Board of Governors today, I believe, at least three of which were appointed by President Trump or former President Trump, and just in a recent news yesterday, I think, I read that Biden had appointed three new people to that Board of Governors, which will fill it out to, I believe, all nine seats. So clearly, in my opinion, due to the award and a decision being made to go, basically, combustion engine vehicles in the fleet at the Post Office and Biden having signed his executive order to take the 645,000 fleet of government vehicles all-electric, I think what we’re seeing is a speed up in what President Biden is doing to put the Board of Governors together in such a way to support his plan going forward.
So again, I don’t — I’m probably getting the news just like you are, directly from the public, as well as the things that we’re doing to follow up with the current situation ourselves and how we’re getting educated. But you’re right, the Postmaster General does not take orders from — directly from the President and it comes from a Board of Governors. However that Board of Governors can be affected by the President and how he seats people on that board.
Craig Irwin — ROTH Capital Partners — Analyst
Understood, thank you for that. Thank you for that. So my next question is DeJoy gave testimony in the last couple of weeks where he seemed a little confused. He said that electric vehicles don’t really have a maintenance benefit over combustion engine vehicles, which seems somewhat ludicrous, in my view. Most truck — EV truck platforms are looking at somewhere between 50% and 75% reduction in maintenance costs, typically around two-thirds. Where do you think DeJoy is getting his information from? And do you think he is at all accurate?
Duane Hughes — Chief Executive Officer and President
Let me — and good question, Craig, I appreciate that. I’ll give you my $0.02 worth, which is really coming directly from our customers. The comparison from a fuel and maintenance perspective of an EV or an electric Workhorse truck as compared to its combustion engine counterpart is absolutely not comparable at all. The EV wins the race by miles upon miles. Right? And so with that said, what I heard Mr. DeJoy say during his time in front of Congress or in front of the sub-committee was that, if you take into account infrastructure that’s required to be put in place in order to charge those vehicles at night then it comes down to a draw. I would argue that also that’s not comparable either. Yes, it adds to the cost, but it does not, one, impact the comparison of the total cost of ownership from an EV to it’s gas engine counterpart.
The other part is if your plan to — if I own my own fleet and the idea was I was buying tens of thousands of these vehicles with a plan to convert them down the road to electric then I would tell you that, that offsets the cost of the infrastructure already. So I don’t believe it was a, I’m going to say, well thought out answer. It was more of a, how do I respond to this and I don’t — and I also recognize, I don’t know if they were talking about a 10-year total cost of ownership or 15-year or 20-year, but what we know is the length of time, and I think this was public, is that we were designing a vehicle the last more than 20 years. So the total cost of ownership at 20 years is where the comparison would need to be made.
Craig Irwin — ROTH Capital Partners — Analyst
Excellent. No, that’s good to hear. Good luck on your challenge of this curious award that was made by the Post Office. So I also wanted to ask a little bit about the new customer opportunity. So you’ve had some pretty nice traction out there with different names. I would assume that now that some of the vehicles have been on the road for the C-1000 vehicles, I should say, have been on the road for several months, there is potential for others to interact with those original operators to learn from them and really see the economics validated. Can you maybe frame out for us how the front-end of your pipeline, the funnel of potential customer interactions is looking? What do you feel about the potential tempo of orders for the C-1000 over the course of the next several quarters?
Duane Hughes — Chief Executive Officer and President
Yeah. I appreciate that. I think what we’re seeing already in terms of the pipeline, in terms of the sales pipeline is movement ahead of where we are today. I can’t speak — I haven’t said anything publicly about this, I want to be a little guarded here. But, for example, I keep talking about this 20-city Purpose Built National Tour that we’re doing with our partner Pritchard, right, where they’re taking two vehicles to these cities and doing real life deliverables and performance and having ride along’s and the things that go along with again demonstrating proof-of-performance. That’s a big deal.
But again with our Hitachi relationship, who has dealers across the country, and if you take just the five states alone where they did a 100-dealer survey in terms of EVs and what they were looking for, Workhorse scored, if I’m not talking out of turn, like highest on the chart in terms of most proof-of-performance, right, the most number of vehicles that are currently out on the road in this space and the most number of electric delivery vehicles that were out prior to the C Series as well.
So we have a deep bench, if you will, of data that allows us to further demonstrate that proof-of-performance added too through our differentiators that I just spoke about with, I think, Colin before. I think what we’re going to see is that continued increase in these orders as we make production match our ability to keep up with those orders. So we’re very excited about the pipeline that we’re seeing, how it’s being able to be built upon, and primarily through those sales channels that I keep talking about you.
Steve Schrader — Chief Financial Officer
Hey, and, Craig, if I can add to that, Craig, is I would say too is, I think we’ve said this to you and others before. Our goal is to make money on selling the truck. But there’s a lot of after-sale opportunities with infrastructure and financing and service. And I think that’s why you see the top quality companies out there that understand that there is money to be made there and they see that we have a product out there that customers like and are ahead of the field by a couple of years and that’s why, we believe, aligned — that’s why Hitachi and Ryder and Pritchard and Pride and Duke are all kind of aligning ourselves [Phonetic] with us. So I think we certainly anticipate more orders this year.
Craig Irwin — ROTH Capital Partners — Analyst
Okay. Excellent, excellent. Last question is actually a question I’ve had from a couple of clients. So let me just frame it out. Right? So everybody has been pretty much shocked by the Oshkosh award and I’m guessing your customers are too. Can you comment maybe whether or not this is impacting your customer relationships or what are your customers saying about this award of the Post Office? Does this really impact you guys from a competitiveness standpoint on the C-1000 core offering going forward?
Duane Hughes — Chief Executive Officer and President
What I would tell you, Craig, is — and I appreciate that question because what we’re hearing from our customers is a lot of the frustration that you’re hearing from the public, as well as the Democratic Senators, and that boils down to much more — even more support for Workhorse, right? We’ve got our customers coming back saying, keep your head high, you’ve got the best product out there, right? We’re with you all the way. Right? And this — and in some cases, it’s we’re even — now are even more motivated to make the point that the EV strategy and the Workhorse EV strategy, in particular, is the way to go. And that’s not just from one customer, that’s from multiple customers along the way. If anything, I always felt like two things. One is, and I’ve always said this, with or without the Post Office, we have a business here and we have the focus on being able to build that business. If the Post Office comes, yes, that’s a game changer and all that.
On the opposite side, what I didn’t realize was how many of our customers are standing behind us and screaming from the rooftops how well we’re doing and so on and so, if anything, I would tell you that it’s been a positive — very positive, overwhelmingly positive response from our customers in support of Workhorse and the vehicles and our future technology roadmap going forward that they’re standing behind.
Craig Irwin — ROTH Capital Partners — Analyst
Okay. And then last question is really just a confirmation. Do we know for a fact, in black and white, somewhere maybe that there was no other EV or hybrid submitted in the entire RFP-RFQ process for this procurement at the Post Office and [Technical Issues] for a fact that the addition was last minute from Oshkosh?
Duane Hughes — Chief Executive Officer and President
Look, all I could speak to is that because we are still technically under NDA with the Post Office is we do know through reporting like trucks.com, the FreightWaves, all the other media and the attention they got is, yes, there was the Oshkosh-Morgan Olson hybrid, right, and then there was the Oshkosh combustion engine forward transit and then there was our vehicles. So we are not aware of any other vehicle that went through — that were of the finalists that went through the durability testing process.
But I cannot speak to what RFP’s were delivered. I’m not aware of any other RFPs being delivered to the Post Office, nor am I aware of what the competitors RFPs said that they would deliver. But I can tell you that our RFP stuck to our stripes and what we sent through durability testing, sure, we may enhance it a little from those learnings, right, and/or from the newer technology that’s even available to us today, but we stuck to our stripes, we gave them an RFP that was based upon the six prototype vehicles that we delivered to them back in January — I’m sorry, back in ’16-’17 timeframe.
Craig Irwin — ROTH Capital Partners — Analyst
Great, well, thank you and good luck with your meeting this week. I’m sure our representatives are going to work hard to do the right thing here. So thanks.
Duane Hughes — Chief Executive Officer and President
I appreciate that, Craig. Thank you.
Operator
Our next question comes from the line of Mike Shlisky with Colliers Securities. Please proceed with your question.
Michael Shlisky — Colliers Securities — Analyst
Hey, good morning, guys.
Duane Hughes — Chief Executive Officer and President
Good morning.
Michael Shlisky — Colliers Securities — Analyst
Good morning. So I wanted to follow up quickly on the postal service contract. I mean Oshkosh has made an investment in an EV battery supplier. Oshkosh is working with Ford [Phonetic], which is going to be producing the 40 transit in next couple of months. I guess if USPS does ask for this whole thing to go EV or mostly EV in the future, do you think Oshkosh can deliver an EV if they were asked to do so?
Duane Hughes — Chief Executive Officer and President
I can’t speak to what Oshkosh’s capabilities are. I would just say, as a defense contractor and the business that they do, they are good at what they do. Right? But I would turn it the other way and say, but I know right now that we are, without a doubt in my mind, right, the most competent EV maker in the last-mile delivery space. First of all, the last-mile delivery space, as we all know, is not like putting any other vehicle out on the road. When you have a vehicle that’s going to go anywhere from 18 miles a day to 300 miles day, let’s call it, and it’s going to stop many, many, many hundreds of times throughout that duty cycle, that puts a lot of different demands on a vehicle than does perhaps a military vehicle and/or even a firetruck and ambulance, other things.
So we know that our many years of experience working with the blue-chip customers we work with, we have substantial amounts of learnings that has allowed us to design last-mile delivery vehicles that not just outperform anybody else we’ve seen to date, right, but also are built for the future; meaning, our vehicles adapt to the future as the future changes. So whether it’s with the idea of autonomous drive, we started autonomous by adding a drone and autonomous with delivery drone to the top, right? It’s crawl, walk, run. So we feel like we are the best solution for anybody who wants to take a fleet all electric, particularly in the last-mile delivery space.
Michael Shlisky — Colliers Securities — Analyst
Okay, great. And then I wanted to ask secondly about the California program that’s out there. It’s a pretty strict pie, there’s a strict amount of fund that they want to put out there and a fixed amount that you can get. So eventually the pie shall run out. And there’s been plenty more competitors in the EV space and it seems like adoption is kind of rolling up here and doing a lot better for the same pie. So I’m curious, do you have any feel for how much — what amount they might fund the HVIP program for, for this year and for next, and will they be increasing it with the number of other competitors that are currently in the EV market?
Duane Hughes — Chief Executive Officer and President
I don’t — this is Duane, again, thanks again for the question. I don’t have an idea of what the fund will be. I guess if you look back historically, you could probably use that as a judgment call. However, we do know that the COVID pandemic has impacted these programs because money is going for other purposes, the same as you see things like the stack up of parts at ports right now because it’s more important that COVID pandemic things get put on those ships and brought over here than the necessary components like microchips and so on. But I guess what I’m saying to that is, I don’t know the amount they are going to fund, but I do know they have altered the program. So rather than having a 100 units dedicated to a fleet, they’re only going to have 30 units dedicated for fleet. And that’s why our focus is on not requiring a voucher to make sense — pencil out, right, provide the right ROI and the substantial total cost of ownership savings.
Again, however, whatever money is available that we are able to garner on behalf of our fleet customers or they can actually garner for themselves, we will use it and take advantage of that, but we are building a business plan that does not require the voucher.
Michael Shlisky — Colliers Securities — Analyst
Got it. Maybe just one last one from me. Between Pride and Pritchard, the 6,820 units [Indecipherable] that have been ordered, can you give us a sense as to the most recent quarter and the sell-through? I mean, what amount has been actually ordered by end users of that number? And what’s your timeframe for getting those delivered to people?
Steve Schrader — Chief Financial Officer
Sure. Certainly, one — first quarter deliveries and we’ll get first quarter deliveries, certainly we’ll talk about the first quarter results on the second — in May when we have our next earnings release. Pride really don’t want any until July. And then just kind of initial order about 20 of — 20 total, 10 each of the 650 and C-1000 for like the last six months. They are stepping into their 6,320 order, they want 600 the following year 2022 and 2023, each year, and then the 5,000 for the last three years. Pride is also looking at — part of their staging it out is given the infrastructure in Canada in place from their standpoint too, making sure that the demand is there as well. So I hope that answers your question, Mike.
Duane Hughes — Chief Executive Officer and President
Well, I would add…
Michael Shlisky — Colliers Securities — Analyst
Actually, I was asking whether they were spoken for yet by end users.
Duane Hughes — Chief Executive Officer and President
I would tell you, we don’t know all of the end users in the group, but they have identified specific end users and we’ve actually delivered a few. But we can’t name those end users because they have plans in the upcoming months to make big splashes in their marketplaces and so on, as to what they’re doing EV-wise. And I mentioned one of those in the script early, an international retailer blah blah blah, but they do have — they have identified their initial fleets to begin deliveries with, but it’s not something we can talk about on today’s call.
Michael Shlisky — Colliers Securities — Analyst
Okay, exciting stuff, guys, appreciate it.
Duane Hughes — Chief Executive Officer and President
Thank you.
Operator
Our next question comes from the line of Jeff Osborne with Cowen and Company. Please proceed with your question.
Jeffrey Osborne — Cowen & Co — Analyst
Hey. Good morning, guys. Most of the questions have been answered. Just a couple of housekeeping questions on my end. One, can you disclose what the deliveries were for Q4 in aggregate?
Steve Schrader — Chief Financial Officer
Yeah, we had, I believe, seven deliveries in Q4.
Jeffrey Osborne — Cowen & Co — Analyst
Got it. And then with everything going on at the factory operationally that you talked about, which was helpful on the detail, Steve, can you give us a sense of what the capex budget is for the year?
Steve Schrader — Chief Financial Officer
Yeah, the capex budget is not huge. I think we’re probably at a budget about $6 million for the year. I think what you need to consider more, though, from a standpoint of the working capital requirements have gone up from last year, quite a bit. One, we doubled the labor force. Two, we’re doing a lot of prepays. Because of our kind of low revenue situation, a lot of vendors want prepays. And three, we’re building up the inventory. So I think the cash requirements are going to be a lot higher this year than they were in the past.
Jeffrey Osborne — Cowen & Co — Analyst
Got it. And then you touched on the gross margin trajectory being negative, sort of, in the near to intermediate term. Can you give us a sense of how many vehicles would need to be sold in the quarter to be gross margin breakeven with the current staffing anticipated and the cost [Speech Overlap] you have?
Steve Schrader — Chief Financial Officer
Sure, Jeff. I think it’s a good question. I’m answering this from a standpoint of where we’re in delivering small volumes right now. And so I want you to keep that in mind, but I anticipate to get to our gross margin, maybe 300 to 400 per month, then we feel we can kind of maybe get to our gross margin targets at that point in time.
Jeffrey Osborne — Cowen & Co — Analyst
That’s the target, which is, what, 15%? But I was talking about breakeven. So if you could just confirm the breakeven and the target.
Steve Schrader — Chief Financial Officer
Oh, breakeven? Yeah, that’s probably closer to 200 per month.
Jeffrey Osborne — Cowen & Co — Analyst
Okay.
Steve Schrader — Chief Financial Officer
We’re going to go through, just like any other manufacturing company, we’re going to go through — we’re in a struggle this year to get that gross margin positive and don’t anticipate going positive this year. So it’s — we’re doing it like every other manufacturing company when you go from R&D or selling equipment to actually putting out the product.
Jeffrey Osborne — Cowen & Co — Analyst
Got it. And my last question, I’m not sure if you can touch on this, but you were helpful with Craig as it relates to the Post Office and some of the dynamics there. You alluded to in the script of exploring all avenues. Can you just talk about what those avenues are above and beyond the meeting on the 3rd?
Duane Hughes — Chief Executive Officer and President
Probably can’t get into too much detail. This is Duane, Jeff, appreciate the question. But we’re talking to different entities and groups out there and really getting our — let’s say, we’re going to get information inflow. Right? So we know what available options that we have and the way to approach, not just the Post Office but whomever else we have to approach to better understand how we might go about having a constructive conversation that leads to something more positive down the road.
Jeffrey Osborne — Cowen & Co — Analyst
Got it. Well, best of luck with the meeting. That’s all I had. Thank you.
Steve Schrader — Chief Financial Officer
Thanks, Jeff.
Operator
Our next question comes from the line of Craig Shere with Tuohy Brothers. Please proceed with your question.
Craig Shere — Tuohy Brothers — Analyst
Good morning. Thanks for taking the question.
Duane Hughes — Chief Executive Officer and President
Thank you.
Steve Schrader — Chief Financial Officer
Hey, Craig.
Craig Shere — Tuohy Brothers — Analyst
Do you see any linkage between additional material or commercial traction and progress towards filling orders already in hand? I mean are basically customers saying, let’s see what you can do with what you’ve got because if I give you a 5,000 unit order in the next three years, what good is it if you’re not ramping production and proving you can get it out the door?
Steve Schrader — Chief Financial Officer
Hi, Craig it’s funny, I think it’s just the opposite situation. I think customers are looking at and saying — they know for the most part this year, the orders, if we get 1,800 out they’ve spoken for. So they are looking at, can I get on your 2022 production schedule? Can I get on your 2023 production schedule? So, if anything, I think it’s a selling point. So, yeah, I don’t think we’re finding any hesitancy of orders from that standpoint because I think they like the truck, they like the price point on it, and again, like we’ve said, I think we anticipate more orders this year for sure.
Duane Hughes — Chief Executive Officer and President
And some of it, Craig, I would tell you is the infrastructure play. Right? Infrastructure has always been like the largest barrier to entry here. So now what we’re starting to see from these customers, when they’re talking about 2022, 2023 is, and can you help us understand what we need to do or who we need to be talking to? So like our partnership, not just with Hitachi, but with Duke’s newly created eTransEnergy service, right, that allows us to help find ways to provide the infrastructure required for these fleets. It really gives us a more well-rounded approach in conversation with these fleets who want to go electric but aren’t quite as far along as other fleets are today.
Craig Shere — Tuohy Brothers — Analyst
Understood. A turnkey offering should be very powerful.
Duane Hughes — Chief Executive Officer and President
Right.
Craig Shere — Tuohy Brothers — Analyst
Can you speak to the timing of filling UPS orders and are there any early indications? I know it, we may not be able to sell it for 12 to 18 months, but any early indications of potential HorseFly orders both in conjunction with the EV truck, but also on a standalone basis?
Duane Hughes — Chief Executive Officer and President
I would answer that by saying, yes, there is potential on all of those fronts. As I mentioned in my remarks, we’ve done — well, for example at the Verizon keynote, right, as the CEO was giving his keynote speech, what you saw in the background was a Workhorse electric vehicle with a Workhorse electric drone leaving the truck, doing a delivery, coming back and focusing on the 5G network for Verizon, their partner UPS in the delivery space, right, and we, the Workhorse technology behind the scenes, bringing that to fruition, if you will, both by using 5G wireless capability with our drone, as well as what we do for UPS. So yes, I would anticipate seeing more business to be had. Of course, there is relationships in these contracts and things that have to be done, but we are working towards making sure we can fulfill our technology with many different customers and fleets.
To that point, the drone, while a key differentiator for our truck side of the business is the truck launched and landing capability, our drone is designed to not require a truck. It can go from a parking lot, a rooftop or virtually any setting, right, that would require deliveries to be made. In the past, we’ve done things from the CVSs of the world’s parking lots and so on as test environments. Right? We do these things. What we did in Virginia, right, in April of last year to — as the pandemic was announced. So, yeah, we feel that we have a very strong business case for the drone, not only to help us sell more trucks, but to be its own standalone business as well.
Craig Shere — Tuohy Brothers — Analyst
I guess I was looking for a couple of things, one is, if I’m not mistaken, of those actually produced and delivered in the third quarter, none went to UPS. I’m trying to get a sense of when the UPS deliveries will start ramping. And I’m also trying to get a sense of your expectation, I know this is kind of in the future of, say, the percentage of your C-1000s that would likely be taking the integrated HorseFly once it’s fully approved, and if you’ve gotten any kind of body language from potential customers about the potential size of standalone orders.
Steve Schrader — Chief Financial Officer
Let me answer the second question first, Craig. I would say there are three major customers you’ve all heard of out there that are definitely interested in the integrated truck drone product. Okay? So we certainly anticipate that something will come out of that down the road. UPS, it’s a combination, obviously, we haven’t got production now. It also is when and where UPS would love to take their vehicles first. They have a depot in California and San Diego that’s already with infrastructure, they’d love to get the voucher program too. So ideally I think their first truck would ideally go to California. Now, somewhat — we are already talking about that HVIP program and how — when that will get funded. So it’s somewhat dependent. I assume — we assume for the most part if that is not funded or they can’t get vouchers and — but we have production trucks ready to deliver them, we anticipate they would want to take them in as well.
Craig Shere — Tuohy Brothers — Analyst
Okay, great. And any quick updates about your refrigerated truck R&D effort?
Robert Willison — Chief Operating Officer
Yeah. This is Rob Willison. We are beginning a build of a test mule. We have a Board of advisors that are helping us coach through the configurations and innovations. It’s no small task to make a refrigerated vehicle with a diesel. It’s even more daunting to make it electric, but I think we have a good path forward. So, we are beginning a mule build on that. We’ll begin to take it through some testing throughout this year and that’s on track as well.
I do want to make a comment about infrastructure, though. Our vehicles and especially for fleet can be charged on Level 2 and what you’ve heard from other fleet manufacturers about fast charge and the cost of fast charge, infrastructure, very expensive as far as the chargers, as well as the amount of electricity needed. Because of the nature of our vehicles being lightweight and very efficient, we can charge overnight on a Level 2 charger, which is much more economical than what some others have done. So what’s been said, our technology — Workhorse is a technology company. We are far away ahead of others, all the way from the drones to the motors, to the batteries, to all of our experience. And so I hope that helps you answer that question.
Craig Shere — Tuohy Brothers — Analyst
That’s great, thank you very much.
Operator
At this time, this concludes the company’s question-and-answer session. If your question was not taken, you may contact Workhorse’s Investor Relations team at WKHS@gatewayir.com. I’d now like to turn the call back over to Mr. Hughes for his closing remarks.
Duane Hughes — Chief Executive Officer and President
Well, thank you again for joining us on our call today. I especially want to thank our employees, our partners, our investors and all of our support folks behind us. We appreciate your continued interest in Workhorse and we look forward to updating you on our next call. Thank you, operator.
Operator
[Operator Closing Remarks]