Workhorse Group is taking a page from Tesla’s playbook.
The electric truck developer started to collect $1,000 refundable deposits from customers who want to purchase the company’s W-15 electric truck.
Tesla Inc. has used that reservations strategy to help fund development of its electric vehicles. The Palo Alto, Calif., company is currently logging $20,000 reservations for its electric semi and has lined up some high-profile customers, including UPS, PepsiCo and Walmart.
Loveland, Ohio,-based Workhorse said it has about 6,000 pre-orders from fleet operators for the W-15. The reservation fee is the first step to monetizing the vehicle and converting pre-orders into firm orders. The truck will sell for $52,000, making the potential book of business worth about $300 million.
“That hasn’t really sunk in yet. That’s obviously significant. All we got to do is build them. It seems so simple,” said Steve Burns, chief executive of Workhorse.
Almost 100 people sent in their deposit money in the first 24 hours, Burns said.
The all-wheel drive W-15 is expected to have an all-electric range of 80 miles and offer 28 mpg in highway driving and 32 mpg in city driving when operating with its standard gasoline-powered range extender alone. The truck’s miles per gallon equivalent rating is 75. The powertrain offers 460 horsepower and a 0-to-60 mph time of 5.5 seconds. Workhorse also plans to include a lane-departure warning system, collision-avoidance technology, automatic brakes and a 7.2-kilowatt power export port.
To build the W-15, Burns said Workhorse is working with suppliers and other companies in Michigan.
“We’re working with a lot of Detroit companies,” Burns said. “That sort of volume starts to require a lot of Detroit knowledge.”
The chassis, for example, can’t be even 1/100th of an inch off.
“It’s got to be perfectly straight. You’ve got to have professionals help you with all that stuff,” he said.
Last year, Workhorse reached a 10-year deal with Ryder System Inc. to become the W-15’s primary distributor and service provider in North America.
Ryder’s average fleet customer has between three and five vehicles, so supporting individuals who only buy one W-15 fits within its sales strategy, said Chris Nordh, Ryder’s senior director of Advanced Vehicle Technologies and Global Fuel Products.
“Ryder already has the sales structure to support very small customers,” Nordh said. “Ryder has a significant amount of understanding and knowledge about what the market wants and needs.”
Nordh believes fleets will want the electric truck.
“Driver turnover is a huge cost to the industry right now. Being able to put them into a product that they like driving lowers that cost.” Nordh said.
For example, some large delivery fleets examine how many knee replacement surgeries they have to provide drivers who become injured “just from pushing the gas, pushing the brake, pushing the gas.,” Nordh said. “When you go to an electric vehicle where you’re not cycling between the gas and the brakes so much, you’re actually not creating these repetitive motion injuries that end up costing the company money.”