Sam is a professional trader and the lead stock market news writer at AskTraders. After starting his career in the forex market, Sam now focuses on gold and stocks with a preference for fundamental and macroeconomic analysis.
Workhorse Group (NASDAQ: WKHS) shares plunged Wednesday after the company decided to suspend deliveries of C-1000 vehicles and recall 41 cars it had already delivered.
Workhorse said it made the decision after identifying several improvements in the production process and design of the C-1000 to address customer feedback related to vehicle dynamics to enhance the vehicles’ payload capacity.
As part of the efforts, the company stated that its new leadership team has decided that additional testing and modifications to existing vehicles are required to certify the C-1000 vehicles under Federal Motor Vehicle Safety Standards (FMVSS).
Electric vehicle firm Workhorse has filed a report with the National Highway Traffic Safety Administration (NHTSA) regarding the need for additional testing and vehicle modifications. However, the company stated that it has not received any reports of safety issues.
The testing is expected to be completed in Q4, with the company providing 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.
“We have identified a number of opportunities to improve our C-1000 series vehicles and are committed to getting these previously delivered vehicles back on the road,” added Dauch.
Workhorse shares have fallen over 12% to $7.20 following the announcement. At the end of August, Workhorse shares rose after announcing a fleet agreement with Amerit Fleet Solutions.
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