Workhorse Group Inc. Q1 FY2026 earnings call

• Post-Merger Integration Progress

  • The combination of Workhorse and Motive remains on schedule. Facility aggregation is complete, and relocation of the Motive production line to the Union City, Indiana plant is progressing as planned, with three production lines (W56 step-van, new F59 chassis, EPIC-4) now operating at the site.
  • Hardware and software platform commonization across engineering is ongoing, supply chain optimization is underway, and external and interim transition support teams are being systematically wound down. The company still expects to hit its previously communicated target of $20 million in annualized cost synergies by the end of 2026.

• Market Outlook for Medium-Duty Commercial EVs

  • Management confirmed that product market fit for medium-duty electric trucks is already proven for high-value use cases (mid-mile/last-mile delivery, municipal fleets, school buses/shuttles, yard operations), and the market is now shifting from proof of concept to scaled deployment.
  • Industry data shows 21% growth in medium and heavy-duty EV registrations in 2025, with major logistics operators already committing to large-scale electrification due to proven total cost of ownership (TCO) advantages over ICE vehicles. Workhorse's own real-world testing found EV operating costs are less than 1/5 of ICE costs, a gap that has widened significantly following recent increases in gas prices.

• Commercial and Product Progress

  • In Q1 2026, Workhorse secured two major purchase orders: 100 W56 step vans from repeat customer Purolator, and a 100-unit order from Gateway Fleets via dealer Kingsburg Truck Center. The company also has 75 W56 step vans deployed or on order for FedEx independent service providers (ISPs).
  • The company launched a lower-priced 140 kWh version of the W56 step van, and implemented reduced promotional pricing for the 210 kWh W56 variant, which drew strong early demand.
  • Management announced two major new product initiatives planned for initial production in early 2027: a new proprietary modular chassis (with scalable architecture, standardized hardware/software for cost-efficient low-volume production) and the company's first Class 5-6 cab chassis, which will pair the new modular chassis with a low-cost lightweight cab for improved payload and competitive ICE-comparable pricing.

• Customer Support and Legal Updates

  • Workhorse announced a new industry-first customer support partnership with InCharge, launching later in 2026, to provide unified end-to-end support for vehicles, charging infrastructure, and third-party systems to maximize fleet uptime across North America.
  • Two legacy legal matters, including the Column Solutions litigation, have been resolved, removing long-standing operational and financial overhangs.

The Q1 2026 consolidated results include three full months of the combined Workhorse and Motive operation, while Q1 2025 results only reflect Motive due to the reverse merger accounting structure, so year-over-year comparisons are not like-for-like. Overall Q1 2026 total revenue was $4.3 million, up from $1.1 million in Q1 2025. The company delivered 21 vehicles in Q1 2026 (the majority of which were W56 step vans), up from 5 vehicles in the prior year period. Cost of sales was $11.8 million in Q1 2026, compared to $2.2 million in Q1 2025, resulting in a gross loss of $7.5 million for the quarter. Selling, general, and administrative expenses were $9.5 million in Q1 2026, compared to $4.3 million in Q1 2025. Research and development expenses were $4.1 million in Q1 2026, compared to $3.7 million in Q1 2025. Operating loss was $21.1 million in Q1 2026, compared to $9.1 million in Q1 2025. Net loss was $19.9 million ($1.99 per basic and diluted share), compared to a net loss of $12.7 million ($1.36 per share) in Q1 2025. No separate segment performance breakdowns by product line were provided.

• Management did not provide full specific financial guidance for 2026 at this call.
• The company reaffirmed its prior commitment to reach a $20 million annualized cost synergy run rate by the end of 2026, maintaining the original target set after the merger.
• Management expects vehicle deliveries to increase progressively throughout 2026 as production ramps up at the consolidated Union City facility and the growing order pipeline converts to revenue.

• Forward-looking statements (including product launch timelines, delivery growth, synergy targets, and demand growth) are subject to inherent risks and uncertainties that could cause actual results to differ materially from expectations, as detailed in the company's SEC filings.
• The company recorded a $1.5 million warranty charge in Q1 2026, as costs for a retrofit campaign for previously sold Motive trucks in Canada were higher than originally estimated, requiring an increase to warranty reserves.
• The company has ongoing liquidity needs to fund production growth and the settlement of legacy legal matters, and while it is actively evaluating additional financing alternatives, no new financing has been finalized at the time of the call.
• Widespread EV adoption in the segment still depends on closing the upfront price gap between EVs and ICE vehicles, which requires successful execution of new product design and cost reduction initiatives that carry implementation risk.

Q: What has been the early demand response to the recent promotional pricing actions for W56 step vans, and how will these pricing initiatives fit into Workhorse's long-term strategy?

A: Management notes the promotional pricing is not a test, but the first step in a planned multi-step strategy to lower vehicle prices as bill of materials and overall cost structure declines. Pricing will be adjusted incrementally (expected roughly annually) as cost reduction initiatives like the new modular chassis launch. Early response has been strong: the 100-unit Gateway Fleets order would not have proceeded without the promotional pricing. The price adjustment targets the large price-sensitive market of ~90,000 FedEx independent service providers, a key addressable segment for Workhorse, and pairs well with Gateway's bundled no-upfront-cost offering that fits small business budget constraints.

Q: Have recent gas price increases impacted customer conversations and demand for Workhorse's EVs yet?

A: Management confirms that while high gas prices are unplanned, they have significantly helped the business's demand profile. While no new hard orders have been directly attributed to gas price increases yet, inbound customer inquiries and the number of potential customers running TCO calculations with current high gas prices has risen sharply over the past 30-60 days. Management expects this increased interest will translate to new orders in the near term.