Workhorse Group Inc. Q2 FY2025 earnings call

• Workhorse secured 36 purchase orders for W56 step vans and shipped 32 trucks in Q2 2025, with over 60 W56 vehicles operating in customer and partner fleets.
• Completed final durability testing for the 140-kilowatt W56 with a 100-mile range, slated for production in early 2026.
• Utilimaster Aeromaster walk-in van body is now available for order on the W56 chassis, adding flexibility to the electric platform.
• Operating expenses decreased by $7 million year-over-year while shipping a record number of vehicles.
• Secured $25 million in interim funding from Motiv's controlling investor via a sale leaseback and secured convertible note financing transaction.
• Announced a strategic combination with Motiv to create a leading North American medium-duty electric truck OEM, combining Motiv's product portfolio and fleet relationships with Workhorse's proven vehicles, manufacturing capabilities, and dealer network.

In the second quarter of 2025, Workhorse secured 36 purchase orders for its W56 step vans and shipped a record 32 trucks. Sales net of returns and allowances for Q2 2025 were $5.7 million, a significant increase from $800,000 in Q2 2024. The W56 shipments were the primary driver of this revenue growth. In terms of revenue contribution, the W56 line of vehicles accounted for a substantial portion of the sales increase, demonstrating its importance in Workhorse's product segment.

• The transaction with Motiv is expected to close in the fourth quarter of 2025, subject to Workhorse shareholder approval and customary closing conditions.
• The combined company intends to seek additional new financing to fuel go-forward plans.
• Workhorse will focus on expanding its product portfolio, finalizing the W56 140-kilowatt production launch in 2026, and integrating product road maps and R&D technology with Motiv post-merger.

• Delayed fleet customer adoption due to market conditions, changing government regulations, and incentives.
• Balance sheet risks as a start-up, which impacted ability to access certain programs and fleet customer adoption.
• Need to address overlap in product portfolios, supply chains, and battery suppliers, and optimize operations post-merger.

Q: Talk about Motiv's history with Hudson County Motors and New Jersey voucher programs.

A: Scott Griffith mentioned a strong relationship with Hudson County Motors, and voucher programs are extensible to other states. Voucher programs are continuing and can be expanded into adjacent states like New York, with opportunities in people mover and box trucks.

Q: Combined company's access to government programs and growth into 2026.

A: Richard Dauch and Scott Griffith noted positive impacts from CARB's new incentive programs, working with large fleets, and financial support for school buses and shuttles. They plan to optimize delivery times from order to delivery to less than 6 months, enabling growth into 2026.

Q: School bus and shuttle market opportunity.

A: Scott Griffith stated that school buses and shuttles are similar platforms with financial and community support. They are highly competitive against internal combustion engine counterparts in terms of total cost of ownership.

Q: Financing adequacy and future capital needs.

A: Richard Dauch mentioned proceeds from the sale leaseback and convertible note, coupled with potential additional capital from the existing secured lender, will support operations through transaction close. Scott Griffith added the merger agreement includes up to $20 million in debt financing and plans to raise additional capital post-merger.

Q: Patent retention and intellectual property from Aero divestiture.

A: Robert Ginnan stated all related patents were included in the divestiture of the Aero division.

Q: Overlap in product portfolios and integration plans.

A: Richard Dauch and Scott Griffith discussed integrating product portfolios, R&D road maps, supply chains, and battery suppliers, leveraging engineering teams to address overlap and optimize products and costs.

Q: First priority in driving sales and targeting market.

A: Scott Griffith and Richard Dauch outlined combining direct sales approach with dealer network, targeting large fleets through pilot phases to multiyear contracts, leveraging existing customer relationships and pilot-to-multi-depot operation models.