WKHS

• Merger Integration Progress

  • Workhorse completed the merger of Workhorse and Motive in December 2025, and is progressing on post-merger integration of enterprise systems, redundant facilities, and overlapping personnel.
  • The company remains on track to hit its target of $20 million in annualized cost synergies by the end of 2026, with operating expenses declining sequentially in Q2 2026 even as production volumes increased.
  • Integration efforts are focused not just on cost reduction, but also on optimizing the organization for growth across both existing and new business lines.

• Commercial Electric Vehicle Product and Cost Strategy

  • The company is executing a multi-pronged bill of materials (BOM) cost reduction program, including discussions with new and existing suppliers for key components, and system consolidation (such as the new integrated Smart Hub power electronics module) to cut costs, reduce weight, and simplify assembly across multiple truck classes.
  • Management is developing a new scalable modular next-generation chassis and Class 5-6 cab chassis platform, expanding beyond the step van segment to compete in the full $23 billion annual U.S. medium-duty truck market. Initial development prototypes are expected in Q4 2026, with production start planned for late 2027.
  • A refreshed enterprise sales approach combined with 2026 promotional pricing has grown the sales pipeline to more than double its size at the start of 2026, with increased demand for late 2026 and 2027 deliveries from new and existing customers.

• New Mobile AI Data Center Business Line

  • In July 2026, Workhorse announced its planned entry into the containerized mobile AI data center market, which is projected to reach $41 billion by 2031, driven by demand for edge AI processing, faster deployment, colocation with energy sources, and localized data privacy compliance.
  • The company will leverage its existing industrial design, engineering, ruggedized manufacturing capabilities, and Union City, Indiana facility to produce turnkey compute-ready mobile platforms, acting as an engineering and manufacturing partner to strategic end-market integrators who will lead customer development and sales.
  • Production and first commercial deliveries are targeted for 2027. This new line is expected to improve utilization of existing assets, generate new revenue and cash flow, and fund ongoing commercial vehicle product development.

• Leadership Update

  • Jody Davis joined as the new Chief Financial Officer in July 2026, bringing deep experience scaling capital-intensive manufacturing and technology businesses. Former CFO Bob Ginnan retired after leading the completion of the Workhorse-Motive merger.

• The company reaffirms its prior target of achieving a $20 million annualized cost synergy run rate from merger integration by the end of 2026, maintaining the original guidance.
• No specific full-year financial or revenue guidance is provided at this time.
• Management expects vehicle deliveries to increase meaningfully in the second half of 2026, with production ramping to fulfill the existing backlog of firm orders including the previously announced 100-vehicle orders from Purolator and Gateway.
• Initial development prototypes of the new modular commercial vehicle chassis are expected in Q4 2026, with start of production planned for late 2027 (maintaining the current development timeline guidance).
• Commercial production and first deliveries of the new mobile AI data center product line are targeted for 2027.

Workhorse Group operates two core product segments as of Q2 2026: Commercial Electric Vehicles and Mobile AI Data Centers. The Commercial Electric Vehicles segment generated $3.6 million in GAAP revenue for Q2 2026, accounting for 100% of total consolidated revenue in the quarter, with 26 vehicles delivered. This compares to $0.8 million in GAAP revenue (4 vehicles delivered) for the standalone Motive business in Q2 2025, and $6.4 million in pro forma combined revenue (39 vehicles delivered) for the merged entity on an adjusted year-over-year basis. For the first half of 2026, the Commercial Electric Vehicles segment reported total revenue of $7.9 million, which is roughly in line with the $8.2 million pro forma combined revenue for the first half of 2025. The Mobile AI Data Center segment is still in pre-commercial development and has not generated any revenue as of Q2 2026.

• Broader adoption of commercial electric trucks in the U.S. is dependent on reaching purchase price parity with internal combustion engine vehicles, and if cost reduction targets are not met, market adoption may remain slow, limiting revenue growth.
• The mobile AI data center market is an emerging, early-stage market, and market development may be slower than expected, or demand may not materialize at the projected scale.
• BOM cost reduction for commercial vehicles depends on both internal engineering efforts and global supply chain market conditions; component cost declines may not occur as quickly as planned, or new suppliers may not deliver expected cost savings.
• The company has a relatively low cash balance as of the end of Q2 2026, which may limit flexibility to fund simultaneous development of the new commercial vehicle platform and the new mobile data center business line if additional capital is not raised in a timely manner.
• Actual results may differ materially from forward-looking statements due to a range of uncertainties, detailed in the company's SEC filings including Form 10-K and Form 10-Q.

Q: What key steps are required to reach commercialization of mobile AI data centers by 2027, and what preliminary feedback has the company received since the announcement?

A: The main steps over the next 10-12 months are finalizing the modular platform design based on market input, completing prototyping, preparing manufacturing capabilities, and expanding the supply chain partner base. The company is also actively developing strategic front-end partnerships with end-market integrators who will lead customer development and sales globally, conversations that are already well underway after extensive pre-entry market research. Management notes that existing in-house engineering talent and the flexible Union City manufacturing footprint are well-suited to support this development timeline.

Q: How much control does Workhorse have over BOM cost reduction for commercial vehicles, versus relying on broad market-driven component cost declines?

A: The BOM cost reduction strategy is a proactive, multi-year effort that goes beyond waiting for market costs to fall. It includes re-evaluating the entire BOM, actively pursuing new global suppliers for high-value components like batteries and e-axles, in addition to working with existing suppliers to lower costs. The modular chassis architecture is intentionally designed to allow easy integration of new, lower-cost component technologies as they become available, aligning with industry technology roadmaps. Management targets a 12-18 month timeline to deliver meaningful cost reductions that will support a path to positive gross margin and free cash flow.