Q4 2025 Workhorse Group Inc Earnings Call

March 31, 2026

Operator 2: Greetings. Welcome to Workhorse Group Q4 2025 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to John Williams, Chief Communications Officer. Thank you. You may begin.

Operator: Greetings. Welcome to Workhorse Group Q4 2025 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to John Williams, Chief Communications Officer. Thank you. You may begin.

Speaker #2: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to John Williams, Chief Communications Officer.

Speaker #2: Thank you. You may begin.

Speaker #3: Thank you, operator. And good afternoon, everyone. I'd like to welcome all of you to Workhorse's fourth quarter and full year 2025 earnings call. Before we begin, I'd like to note that we have posted our results for the fourth quarter and full year ended December 31, 2025, via press release and 8-K.

John Williams: Thank you, operator, and good afternoon, everyone. I'd like to welcome all of you to Workhorse's Q4 and full year 2025 earnings call. Before we begin, I'd like to note that we have posted our results for the Q4 and full year ended 31 December 2025 via press release in 8-K and filed our associated annual report on Form 10-K with the SEC. You can find the release and an accompanying presentation in the investor relations section of our website. We will be tracking along with the presentation during this call. Joining me on today's call are Scott Griffith, our Chief Executive Officer, and Bob Ginnan, our Chief Financial Officer. For today's agenda, please turn to slide 3. Following my opening remarks, I will hand it over to Scott, who will give you an overview of the combined company and our strategic priorities.

Speaker #3: And filed our associated annual report on Form 10-K with the SEC. You can find the release and an accompanying presentation in the Investor Relations section of our website.

Speaker #3: We will be tracking along with the presentation during this call. Joining me on today's call are Scott Griffith, our chief executive officer, and Bob Ginnan, our chief financial officer.

Speaker #3: For today's agenda, please turn to slide three. Following my opening remarks, I will hand it over to Scott, who will give you an overview of the combined company and our strategic priorities.

Speaker #3: Bob will then walk us through our financial results for the quarter and full year, as well as our capital position. Scott will then close us out before we open up the call for questions.

John Williams: Bob will then walk us through our financial results for the quarter and full year, as well as our capital position. Scott will then close us out before we open up the call for questions. Our cautionary statements can be found on slide four. Some of the comments that will be made today are forward-looking statements, which are based on current expectations, projections, or opinions about future periods. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties are discussed in today's press release and in our filings with the SEC, including our Form 10-K. Now, I'll turn it over to Scott.

Speaker #3: Our cautionary statements can be found on slide four. Some of the comments that will be made today are forward-looking statements, which are based on current expectations, projections, or opinions about future periods.

Speaker #3: All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties are discussed in today's press release and in our filings with the SEC, including our Form 10-K.

Speaker #3: Now, I'll turn it over to Scott.

Speaker #4: Thanks, John. Good afternoon, everyone, and thank you for joining us. This is a milestone moment for Workhorse—our first earnings report as a combined company, following the completion of our merger with Motive Electric Trucks in December 2025.

Scott Griffith: Thanks, John. Good afternoon, everyone, and thank you for joining us. This is a milestone moment for Workhorse, our first earnings report as a combined company following the completion of our merger with Motiv Electric Trucks in December 2025. Before I get into the substance of what we've accomplished and where we're headed, let me briefly introduce myself for those I haven't yet had the chance to meet. I came to Workhorse through our merger with Motiv, where I served as Chief Executive Officer. Before that, I spent much of my career building and scaling technology-driven transportation businesses, including operating and board roles at Ford, EVgo, Zipcar, Boeing, and TrueMotion. I took on this role because I believe Workhorse has the right products, the right customers, and the operational foundation to build a profitable scale business in the medium-duty commercial truck market.

Speaker #4: Before I get into the substance of what we've accomplished and where we're headed, let me briefly introduce myself for those I haven't yet had the chance to meet.

Speaker #4: I came to Workhorse through our merger with Motive, where I served as chief executive officer. Before that, I spent much of my career building and scaling technology-driven transportation businesses, including operating and board roles at Ford, EVgo, Zipcar, Boeing, and TruMotion.

Speaker #4: I took on this role because I believe Workhorse has the right products, the right customers, and the operational foundation to build a profitable, scaled business in the medium-duty commercial truck market.

Speaker #4: I've seen what it looks like when the technology is right, the market is ready, and the execution is focused. That's where we are. Let me start with what Workhorse is today.

Scott Griffith: I've seen what it looks like when the technology is right, the market is ready, and the execution is focused. That's where we are. Let me start with what Workhorse is today. The new Workhorse is a leading North American medium-duty commercial vehicle OEM with a portfolio spanning classes 4, 5, and 6. We bring more than 20 years of combined operating experience, more than $860 million in previously invested capital, and a growing presence in the $23 billion North American medium-duty truck market. The proof of our platform is on the road. Our vehicles operating in customer fleets have now surpassed 20 million real-world miles across more than 1,100 vehicles deployed with some of the largest commercial and public sector fleets in North America. These are not test vehicles.

Speaker #4: The new Workhorse is a leading North American medium-duty commercial vehicle OEM with a portfolio spanning classes 4, 5, and 6. We bring more than 20 years of combined operating experience, more than 860 million in previously invested capital, and a growing presence in the 23 billion North American medium-duty truck market.

Speaker #4: The proof of our platform is on the road. Our vehicles operating in customer fleets have now surpassed 20 million real-world miles across more than 1,100 vehicles deployed with some of the largest commercial and public sector fleets in North America.

Speaker #4: These are not test vehicles. These are trucks in daily service, running delivery routes, generating real operational data through our embedded telematics platform, and delivering consistent documented results.

Scott Griffith: These are trucks in daily service, running delivery routes, generating real operational data through our embedded telematics platform, and delivering consistent documented results. We serve 10 of the largest medium-duty commercial truck fleets in North America, and we continue to see repeat purchase behavior, which we believe is a strong signal of customer satisfaction in this market. At the close of the merger in December, we made three clear commitments, complete the integration, expand our product portfolio, and strengthen our financial position. In just over three months, here's where we stand. On integration, our board and governance structure are in place. Workforce and office integrations are nearly complete, and we have finished a full review of our enterprise systems and operating processes.

Speaker #4: We serve 10 of the largest medium-duty commercial truck fleets in North America and we continue to see repeat purchase behavior, which we believe is a strong signal of customer satisfaction in this market.

Speaker #4: At the close of the merger in December, we made three clear commitments: complete the integration, expand our product portfolio, and strengthen our financial position.

Speaker #4: In just over three months, here's where we stand. On integration, our board and governance structure are in place. Workforce and office integrations are nearly complete, and we have finished a full review of our enterprise systems and operating processes.

Speaker #4: We expect full enterprise integration to be complete over the next two to three quarters, with our manufacturing consolidation at Union City, Indiana, wrapping up by the end of Q2 2026.

Scott Griffith: We expect full enterprise integration to be complete over the next 2 to 3 quarters, with our manufacturing consolidation at Union City, Indiana, wrapping up by the end of Q2 2026. We're targeting to exit 2026 with a run rate of $20 million in annualized cost synergies from the merger across manufacturing efficiency, headcount reductions, the elimination of other duplicative administrative functions, and other synergies, including the elimination of redundant expenses, supply chain cost savings, and reduced overall facility costs stemming from the consolidation of our operating locations.

Speaker #4: We're targeting to exit 2026 with a run rate of $20 million in annualized cost synergies from the merger, across manufacturing efficiency, headcount reductions, the elimination of other duplicative administrative functions, and other synergies including the elimination of redundant expenses, supply chain cost savings, and reduced overall facility costs stemming from the consolidation of our operating locations.

Speaker #4: On our product portfolio, our teams are working together on a new cycle plan and product roadmap. This charts a path for the commonization of key components of our hardware and software platforms, along with the development of a proprietary Class 5/6 CAP chassis to unlock a larger slice of the full $23 billion Class 4 through 6 commercial truck marketplace.

Scott Griffith: On our product portfolio, our teams are working together on a new cycle plan and product roadmap that charts a path for the commonization of key components of our hardware and software platforms, along with the development of a proprietary Class 5, 6 cab chassis to unlock a larger slice of the full $23 billion Class 4 through 6 commercial truck marketplace. As I discuss in a moment, we've already taken our first concrete step, the introduction of a new lower cost configuration of the W56 step van. We anticipate having additional pricing flexibility across our platforms as we realize merger synergies, lower our bill of materials costs by utilizing commonized components across platforms, and expanding our product line. On financial position, we entered the year with a stronger balance sheet following the merger.

Speaker #4: And as I discussed a moment ago, we've already taken our first concrete step: the introduction of a new lower-cost configuration of the W56 step van.

Speaker #4: We anticipate having additional pricing flexibility across our platforms as we realize merger synergies lower our bill of materials costs by utilizing commonized components across platforms, and expanding our product line.

Speaker #4: On financial position, we entered the year with a stronger balance sheet following the merger, and as we disclosed when we closed the merger, we put in place a new $40 million customer-ordered lending facility to support working capital to fulfill orders.

Scott Griffith: As we disclosed when we closed the merger, we put in place at closing a new $40 million customer ordered lending facility to support working capital to fulfill orders. I'm pleased with how far we've come in a short amount of time, but there's more to be done. Now, let me tell you how we get from here to a larger scale, profitable business and why we believe the path is clear and achievable. Let's start with the market. The medium-duty truck market in North America is large, approximately $23 billion in annual sales, and it's ripe for disruption. To understand why the timing is right, consider what has happened to how finished goods actually move through the sales and delivery channels. Before 2020, e-commerce was a meaningful but smaller channel, roughly 11% to 12% of US retail.

Speaker #4: I'm pleased with how far we've come in a short amount of time. But there's more to be done. Now, let me tell you how we get from here to a larger scale profitable business and why we believe the path is clear and achievable.

Speaker #4: Let's start with the market. The medium-duty truck market in North America is large—approximately $23 billion in annual sales—and it's ripe for disruption.

Speaker #4: To understand why the timing is right, consider what has happened to how finished goods actually move through the sales and delivery channels. Before 2020, e-commerce was a meaningful but smaller channel.

Speaker #4: Roughly 11 to 12 percent of U.S. retail. The pandemic accelerated the use of e-commerce over bricks-and-mortar stores by more than 40 percent in a single year, and critically, that shift in demand to online didn't revert.

Scott Griffith: The pandemic accelerated the use of e-commerce over bricks and mortar stores by more than 40% in a single year. Critically, that shift in demand to online didn't revert. It reset to a new normal. Total US retail sales are forecast to reach 6.2 trillion by 2030, with e-commerce accounting for 29% of that total, according to Forrester Research. The front door to homes and offices have become the point of sale, and the truck that shows up at that door is the last link in the chain. That shift has forced a fundamental redesign of logistics networks and supply chains. The old hub and spoke logistics model is giving way to distributed fulfillment, hyper-localized inventory, smaller and more numerous distribution nodes located closer to the end customer. This results in shorter mid-mile and last-mile routes and higher density for deliveries.

Speaker #4: It reset to a new normal. Total U.S. retail sales are forecast to reach $6.2 trillion by 2030, with e-commerce accounting for 29 percent of that total, according to Forrester Research.

Speaker #4: The front door to homes and offices have become the point of sale. And the truck that shows up at that door is the last link in the chain.

Speaker #4: That shift has forced a fundamental redesign of logistics networks and supply chains. The old hub-and-spoke logistics model is giving way to distributed fulfillment—hyper-localized inventory, with smaller and more numerous distribution nodes located closer to the end customer.

Speaker #4: This results in shorter mid-mile and last-mile routes, and higher density for deliveries. The result is visible in the data. Annual mileage for medium-duty vehicles has grown from roughly 31,000 miles in 2020 to nearly 48,000 miles in 2025, even as heavy-duty truck mileage has declined.

Scott Griffith: The result is visible in the data. Annual mileage for medium-duty vehicles has grown from roughly 31,000 miles in 2020 to nearly 48,000 miles in 2025, even as heavy-duty truck mileage has declined. The shift is also evident in smaller delivery van segments as well. Cox Automotive data shows Rivian registered 2,230 Class 2 electric vehicles in 2022. That increased to 7,679 in 2023 and grew to a total of over 33,000 vehicles registered between 2022 and 2025. The key takeaways we see here, delivery freight is moving closer to the customer in rapidly growing networks. The routes are getting shorter and more predictable, and many of the additional vehicles doing this work are squarely in Class 4 through 6. This isn't a trend. It's a structural reallocation of freight, and it plays directly into our strengths at Workhorse.

Speaker #4: The shift is also evident in smaller delivery van segments as well. Cox Automotive data shows Rivian registered 2,230 Class 2 electric vehicles in 2022.

Speaker #4: That increased to 7,679 in 2023 and grew to a total of over 33,000 vehicles registered between '22 and 2025. The key takeaways we see here: delivery freight is moving closer to the customer, and rapidly growing networks; the routes are getting shorter and more predictable; and many of the additional vehicles doing this work are squarely in Class 4 through 6.

Speaker #4: This isn't a trend; it's a structural reallocation of freight, and it plays directly into our strengths at Workhorse. While this structural shift occurred, most commercial fleets continue to run ICE truck platforms that are often unconnected, expensive to maintain, and increasingly out of step with what operators and regulators demand.

Scott Griffith: While this structural shift occurred, most commercial fleets continue to run ICE truck platforms that are often unconnected, expensive to maintain, and increasingly out of step with what operators and regulators demand. Now, after all of this recent growth and change in transport networks, we're seeing a new trend emerging among some of the largest commercial fleet operators. As they adjust to the new normal in commerce, companies are embarking on a massive restructuring of many of their networks with a focus on network optimization, depot consolidation, adding smaller same-day mini warehouse nodes for final and last-mile delivery. Companies ranging from FedEx, UPS, Purolator, Cintas, Amazon, Pepsi, Frito-Lay, and many more are looking at how to use data and AI to optimize routes, add automation, and reduce transportation network operating costs.

Speaker #4: Now, after all of this recent growth and change in transport networks, we're seeing a new trend emerging among some of the largest commercial fleet operators.

Speaker #4: As they adjust to the new normal in commerce, companies are embarking on a massive restructuring of many of their networks, with a focus on network optimization, depot consolidation, adding smaller same-day mini warehouse nodes, or final and last-mile delivery.

Speaker #4: Companies ranging from FedEx, UPS, Purolator, Cintas, Amazon, Pepsi Frito-Lay, and many more are looking at how to use data and AI to optimize routes, add automation, and reduce transportation network operating costs.

Speaker #4: In addition, they're looking to add safety and driver assistance features as they move from next-day to same-day delivery and fulfillment commitments. Software-defined vehicles and electrification are well-suited for this segment.

Scott Griffith: In addition, they're looking to add safety and driver assistance features as they move from next day to same day delivery and fulfillment commitments. Software-defined vehicles and electrification are well suited for this segment. Medium-duty routes are predictable, and most routes are depot-based and well within the range of today's batteries. Vehicles return to depot overnight for charging, and the operating cost savings are significant and can be verified. Our Stables by Workhorse division, which operates as an independent FedEx contractor in Ohio, has documented savings of approximately 64% on fuel and maintenance compared to internal combustion vehicles derived from 3 years of real-world mixed fleet comparisons. That's not a projection, that's operational data.

Speaker #4: Medium-duty routes are predictable, and most routes are depot-based and well within the range of today’s batteries. Vehicles return to the depot overnight for charging, and the operating cost savings are significant and can be verified.

Speaker #4: Our stables by Workhorse division, which operates as an independent FedEx contractor in Ohio, has documented savings of approximately 64 percent on fuel and maintenance compared to internal combustion vehicles, derived from three years of real-world mixed-fleet comparisons.

Speaker #4: That's not a projection, that's operational data. So while most of these routes are primarily being served by internal combustion-powered trucks today, the economic, operational, and environmental benefits of replacing those ice trucks with software-defined electric vehicles are becoming clearer to these large fleet operators.

Scott Griffith: While most of these routes are primarily being served by internal combustion powered trucks today, the economic, operational, and environmental benefits of replacing those ICE trucks with software-defined electric vehicles are becoming clearer to these large fleet operators. We're seeing similar data and EV adoption trends in another key segment we serve, school buses and shuttles. We believe these trends will continue as we introduce our next generation of vehicles with even better economic and operating benefits versus internal combustion trucks. To sum it up, we're not starting from zero. Our commercial fleet customers already have over 1,100 of our trucks on the road with 10 of North America's largest medium-duty fleets, more than 20 million cumulative miles driven, and a growing purchase order backlog. The momentum at Workhorse is real. Now, let's talk about our path to profitability. Here's the key insight.

Speaker #4: We're seeing similar data in EV adoption trends in another key segment we serve: school buses and shuttles. We believe these trends will continue as we introduce our next-generation vehicles with even better economic and operating benefits versus internal combustion trucks.

Speaker #4: To sum it up, we're not starting from zero. Our commercial fleet customers already have over 1,100 of our trucks on the road, with 10 of North America's largest medium-duty fleets, more than 20 million cumulative miles driven, and a growing purchase order backlog.

Speaker #4: The momentum at Workhorse is real. Now, let's talk about our path to profitability. Here's the key insight: we don't need a large slice of this market to reach profitability.

Scott Griffith: We don't need a large slice of this market to reach profitability. We believe we only need a very small one. The installed North American medium-duty fleet is estimated to be about 5 million vehicles. Annual truck production runs at about 200,000 to 250,000 units per year, which ACT Research pegs as roughly the average replacement rate for these classes of trucks. We believe capturing approximately 1% of that annual market, or roughly 2,500 vehicles per year, is very achievable. Based on our modeling, we believe that doing so would enable us to reach cash flow break even by the end of 2028. For a company that is already trusted by 10 of the largest fleets on the continent, that's not a stretch goal. We believe it is a modest, executable milestone.

Speaker #4: We believe we only need a very small one. The installed North American medium-duty fleet is estimated to be about $5 million vehicles. Annual truck production runs at about $200,000 to $250,000 units per year, which ACT Research pegs as roughly the average replacement rate for these classes of trucks.

Speaker #4: We believe capturing approximately 1 percent of that annual market, or roughly 2,500 vehicles per year, is very achievable. And based on our modeling, we believe that doing so would enable us to reach cash flow break-even by the end of 2028.

Speaker #4: For a company that has already been trusted by 10 of the largest fleets on the continent, that's not a stretch goal. We believe it is a modest, executable milestone.

Speaker #4: And here's the second point: we already have the manufacturing capacity to get there. Our Union City, Indiana facility can produce more than 5,000 vehicles per year on a single operating shift.

Scott Griffith: Here's the second point. We already have the manufacturing capacity to get there. Our Union City, Indiana facility can produce more than 5,000 vehicles per year on a single operating shift. Our anticipated break even volume of approximately 2,500 units represents just 50% of that existing capacity. We do not need to build new facilities. We do not need to invest significant capital in manufacturing infrastructure. The plant is built, tooled, and ready. Getting to profitability is a question of executing our product development plans, ramping up production, and sales execution, not investing substantial CapEx into new manufacturing equipment and facilities. How do we get there? The first lever is cost. We need to drive down the bill of materials and bring our vehicles to price points that are competitive with conventional ICE trucks.

Speaker #4: Our anticipated break-even volume of approximately 2,500 units represents just 50 percent of that existing capacity. We do not need to build new facilities, we do not need to invest significant capital in manufacturing infrastructure—the plant is built, tooled, and ready.

Speaker #4: Getting to profitability is a question of executing our product development plans, ramping up production, and sales execution, not investing substantial CapEx into new manufacturing equipment and facilities.

Speaker #4: So how do we get there? The first lever is cost. We need to drive down the bill of materials and bring our vehicles to price points that are competitive with conventional ICE trucks.

Speaker #4: This is where we believe our merger synergies, our platform commonization strategy, our economies of scale, and our supply chain discipline can all come together.

Scott Griffith: This is where we believe our merger synergies, our platform commonization strategy, our economies of scale, and our supply chain discipline can all come together. We're already seeing the early results. We just launched a new lower configuration of the W56 step van featuring a 140kW battery option. That's not a minor adjustment. It reflects the first wave of synergy savings being passed directly to our customer base. As we commonize hardware and software across our Class Four, Five, and Six lineup, the savings can compound. Shared architecture means lower per unit costs, fewer unique components to source and inventory, and faster speed to market for new configurations. We're targeting a minimum of $20 million in annualized cost synergies from the merger integration alone and our product roadmap designed to unlock further reductions as we scale.

Speaker #4: We're already seeing the early results. We just launched a new lower configuration of the W56 step van featuring 140-kilowatt battery option. That's not a minor adjustment; it reflects the first wave of synergy savings being passed directly to our customer base.

Speaker #4: As we commonize hardware and software across our Class 4, 5, and 6 lineup, the savings can compound. Shared architecture means lower per-unit costs, fewer unique components to source and inventory, and faster speed to market for new configurations.

Speaker #4: We're targeting a minimum of 20 million in annualized cost synergies from the merger integration alone, and our product roadmap designed to unlock further reductions as we scale.

Speaker #4: We believe we have a clear, executable plan to reach ice-comparable pricing, and when we get there, combined with the estimated 60 percent operating cost advantage our trucks already deliver, the total cost of ownership argument becomes extremely compelling for any fleet operator.

Scott Griffith: We believe we have a clear executable plan to reach ICE comparable pricing. When we get there, combined with the estimated 60% operating cost advantage our trucks already deliver, the total cost of ownership argument becomes extremely compelling for any fleet operator. The second lever is sales. Let me walk through our strategy for reaching our profitability target. We have a broadened product line. The merger with Motiv expanded our product portfolio beyond the W56 step van to include vehicles that serve Class Four shuttles, transits, Type A school buses, and work truck applications. It adds to the opportunity to sell to the state, local, education or SLED fleet segment. This is meaningful. It's opened up an entirely new customer category for Workhorse and expands the number of early adopting fleet operators we can serve with the compelling electric options.

Speaker #4: The second lever is sales. Let me walk through our strategy for reaching our profitability target. We have a broadened product line. The merger with Motive expanded our product portfolio beyond the W56 step van to include vehicles that serve Class 4 shuttles, transits, Type A school buses, and work truck applications, and it adds to the opportunity to sell to the state, local, education, or SLED fleet segment.

Speaker #4: This is meaningful. It's opened up an entirely new customer category for Workhorse, and expands the number of early-adopting fleet operators we can serve with compelling electric options.

Speaker #4: We go to market through a blended approach: internally staffed national account development targeting new and large existing customers, bodybuilders, and fleet-as-a-service providers. This is complemented by a dealer network that extends our reach into regional and mid-market fleet operators and provides leverage for after-sales and parts support.

Scott Griffith: We go to market through a blended approach, internally staffed national account development, targeting new and large existing customers, body builders, and fleet as a service providers. This is complemented by a dealer network that extends our reach into regional and mid-market fleet operators and provides leverage for after sales and parts support. I'm pleased to report we've fully integrated both sales teams and approaches since we closed the merger, and we are already seeing active and growing customer engagement as a result. Our sales strategy is focused on three primary paths to growth. First, we're deepening existing accounts. Our repeat purchase rate from current customers is extremely strong, and these relationships are the most efficient source of near-term volume. Yesterday's announcement of another Purolator follow-on order is a good example of this.

Speaker #4: I'm pleased to report we fully integrated both sales teams and approaches since we closed the merger and we are already seeing active and growing customer engagement as a result.

Speaker #4: Our sales strategy is focused on three primary paths to growth. First, we're deepening existing accounts. Our repeat purchase rate from current customers is extremely strong, and these relationships are the most efficient source of near-term volume.

Speaker #4: Yesterday's announcement of another Purolator follow-on order is a good example of this. Second, we're actively targeting fleets in states with meaningful compliance requirements and purchase incentives for zero-emission vehicles.

Scott Griffith: Second, we're actively targeting fleets and states with meaningful compliance requirements and purchase incentives for zero-emission vehicles, where the economics of adoption are most compelling right now. This is also where we're continuing to push into Canada, where we have a well-established relationship with Purolator. Third, as I mentioned earlier, we're pursuing municipal fleet operators, state, local, and education, where procurement timelines can be longer, but order volumes are substantial and the environmental and compliance drivers are strong. We're seeing positive trends in opportunity creation, progression, and closings that reflect the early impact of the operational and strategic changes we've implemented since the merger closed. As we close out Q1, this progress is translating into a strengthening sales backlog that we believe supports our plans for 2026 and beyond. The final piece is capital.

Speaker #4: We're the economics of adoption are most compelling right now. This is also where we're continuing to push into Canada. Where we have a well-established relationship with Purolator.

Speaker #4: Third, as I mentioned earlier, we're pursuing municipal fleet operators, as well as state, local, and education, where procurement timelines can be longer, but order volumes are substantial and the environmental and compliance drivers are strong.

Speaker #4: We're seeing positive trends in opportunity creation, progression, and closings that reflect the early impact of the operational and strategic changes we've implemented since the merger closed.

Speaker #4: As we close out Q1, this progress has translated into a strengthening sales backlog that we believe supports our plans for 2026 and beyond. The final piece is capital.

Speaker #4: Executing on this plan—ramping production, investing in our product roadmap, and growing our sales organization—requires a stronger balance sheet than where we are today.

Scott Griffith: Executing on this plan, ramping production, investing in our product roadmap, and growing our sales organization requires a stronger balance sheet than where we are today. We are actively working to evaluate financing alternatives, increasing engagement with analysts, and attending investor conferences as part of that work. We believe that strengthening our balance sheet at this stage will position us to capitalize on the commercial momentum we are building and invest in the roadmap I've described. We'll share more of the details as they become available on capital formation. With that, let me turn it back over to Bob to walk through the financial details. Bob?

Speaker #4: We're actively working to evaluate financing alternatives. Increasing engagement with analysts and attending investor conferences is part of that work. We believe that strengthening our balance sheet at this stage will position us to capitalize on the commercial momentum we are building and invest in the roadmap I've described.

Speaker #4: We'll share more of the details as they become available on Capital Formation. With that, let me turn it back over to Bob. He'll walk through the financial details.

Speaker #4: Bob.

Speaker #2: Thanks, Scott. Good afternoon, everyone. I will walk you through our fourth quarter and full-year 2025 financial results, our balance sheet, and our current liquidity position.

Robert Ginnan: Thanks, Scott. Good afternoon, everyone. I will walk you through our Q4 and full year 2025 financial results, our balance sheet, and our current liquidity position. Before I get into the numbers, a brief note on our reporting framework. The merger with Motiv closed on 15 December 2025. The merger was accounted for as a reverse merger, and as a result, our Q4 and full year 2025 financial statements reflect Motiv on a standalone basis through 15 December and the combined company from 16 December onward. All amounts that I will share are prepared on this basis unless otherwise noted. Revenue for the Q4 of 2025 was $9.7 million compared to $6 million in the Q4 of 2024. During the Q4, we delivered 65 vehicles, bringing our full year 2025 total to 112 units.

Speaker #2: Before I get into the numbers, a brief note on our reporting framework. The merger with Motive closed on December 15, 2025. The merger was accounted for as a reverse merger, and as a result, our fourth quarter and full-year 2025 financial statements reflect Motive on a standalone basis through December 15 and the combined company from December 16 onward.

Speaker #2: All amounts that I will share are prepared on this basis unless otherwise noted. Revenue for the fourth quarter of 2025 was $9.7 million, compared to $6 million in the fourth quarter of 2024.

Speaker #2: During the fourth quarter, we delivered 65 vehicles, bringing our full-year 2025 total to 112 units. This compares to 46 units delivered in full-year 2024 and 40 vehicles in Q4 2024.

Robert Ginnan: This compared to 46 units delivered in full year 2024 and 40 vehicles in Q4 2024. The increase was driven by deliveries of follow-on orders from existing customers. Cost of sales for Q4 was $15.5 million compared to $9 million in the prior year. Gross margin for the quarter was -$5.7 million. We continue to expect gross margin improvement as we scale production volumes and realize the cost benefits of the combined platform. We believe our path to cash flow breakeven is tied to reaching approximately 2,500 units of annual production, which is achievable with our existing manufacturing footprint. As Scott noted, existing plant capacity supports this level of production and more with minimal additional CapEx required.

Speaker #2: The increase was driven by deliveries of follow-on orders from existing customers. Cost of sales for the fourth quarter was $15.5 million compared to $9 million in the prior year.

Speaker #2: Gross margin for the quarter was a negative $5.7 million. We continue to expect gross margin improvement as we scale production volumes and realize the cost benefits of the combined platform.

Speaker #2: We believe our path to cash flow break-even is tied to reaching approximately 2,500 units of annual production. Which is achievable with our existing manufacturing footprint. As Scott noted, existing plant capacity supports this level of production and more with minimal additional CapEx required.

Speaker #2: Total operating expenses for the fourth quarter were $14.4 million compared to $13.5 million in the fourth quarter of 2024. The fourth quarter of 2025 included $4.9 million of merger expenses primarily legal and banking costs.

Robert Ginnan: Total operating expenses for Q4 were $14.4 million compared to $13.5 million in Q4 2024. Q4 2025 included $4.9 million of merger expenses, primarily legal and banking costs. The prior year period included $6.2 million charge to impair assets invested in discontinued product line. 2025 also included $1.4 million of spending in Q4 2025 for the additional SG&A and R&D cost of Workhorse from the merger date through the end of the year. Operating loss was $20.1 million in Q4 2025 compared to $16.5 million in Q4 2024. Interest expense in Q4 2025 was four point four million compared to $3 million in 2024.

Speaker #2: The prior year period included $6.2 million charged to impair assets invested in discontinued product line. 2025 also included $1.4 million of spending in the fourth quarter of 2025 for the additional SG&A and R&D cost of Workhorse from the merger date through the end of the year.

Speaker #2: Operating loss was $20.1 million in Q4 2025 compared to $16.5 million in Q4 2024. Interest expense in Q4 2025 was $4.4 million compared to $3 million in 2024.

Speaker #2: These interest costs largely reflect the interest costs of pre-merger Motive debt, which was all settled in connection with the merger with Workhorse. These historical interest costs are not reflective of our anticipated go-forward interest and financing costs, as new lower-cost financing facilities were put in place as part of the merger.

Robert Ginnan: These interest costs largely reflect the interest costs of pre-merger Motiv debt, which was all settled in connection with the merger with Workhorse. These historical interest costs are not reflective of our anticipated go forward interest and financing costs as new lower cost financing facilities were put in place as part of the merger. Additionally, these new financing arrangements are at a more favorable interest rates than the pre-merger Motiv debt arrangements. Net loss for Q4 was $23.7 million compared to $19.6 million the same period last year. For the full year 2025, revenue was $21.2 million compared to $7 million for the full year 2024.

Speaker #2: Additionally, these new financing arrangements are at more favorable interest rates than the pre-merger Motive debt arrangements. Net loss for the fourth quarter was $23.7 million, compared to $19.6 million in the same period last year.

Speaker #2: For the full year 2025, revenue was $21.2 million compared to $7 million for the full year 2024. On a pro forma basis, if the merger had been completed for both full-year periods, total revenue for the full year 2025 would have been $34 million compared to $13.7 million in 2024.

Robert Ginnan: On a pro forma basis, if the merger had been completed for both full year periods, total revenue for the full year 2025 would have been $34 million compared to $13.7 million in 2024. The increase was primarily due to an increase in the number of vehicles sold in 2025 compared to 2024. These pro forma figures are provided for illustrative purposes and are not necessarily indicative of the results that the combined company would have achieved had the merger been completed at the beginning of those periods. Turning to our balance sheet. As of December 31, 2025, the combined company had $12.9 million of cash and cash equivalents, including restricted cash of $700,000. A key benefit of the merger was the simplification of our capital structure.

Speaker #2: The increase was primarily due to an increase in the number of vehicles sold in 2025 compared to 2024. These pro forma figures are provided for illustrative purposes and are not necessarily indicative of the results the combined company would have achieved if the merger had been completed at the beginning of those periods.

Speaker #2: Turning to our balance sheet, as of December 31, 2025, the combined company had $12.9 million of cash and cash equivalents, including restricted cash of $700,000.

Speaker #2: A key benefit of the merger was the simplification of our capital structure. As of December 31, 2025, our only outstanding debt is a $5 million convertible note, which may convert to equity in connection with post-closing equity financing, and $10 million outstanding under a new cash flow credit facility put in place at closing.

Robert Ginnan: As of 31 December 2025, our only outstanding debt is $5 million convertible note, which may convert to equity in connection with post-closing equity financing, and $10 million outstanding under a new cash flow credit facility put in place at closing. In addition, we have access to a purchase order-backed customer order lending facility of up to $40 million to fund vehicle manufacturing as we receive confirmed orders. We had no borrowings outstanding under this facility as of the end of 2025. Looking ahead, we are actively exploring opportunities to raise additional capital to support our growth plan. We are evaluating financing alternatives and believe the strengthening of our balance sheet at this stage will position us to capitalize on commercial momentum we are building and to invest in the product roadmap Scott described. We will share more details as they become available.

Speaker #2: In addition, we have access to a purchase order back customer order lending facility of up to $40 million to fund vehicle manufacturing as we receive confirmed orders.

Speaker #2: We had no borrowings outstanding under this facility as of the end of 2025. Looking ahead, we are actively exploring opportunities to raise additional capital to support our growth plan.

Speaker #2: We are evaluating financing alternatives and believe the strengthening of our balance sheet at this stage will position us to capitalize on the commercial momentum we are building, and to invest in the product roadmap Scott described.

Speaker #2: We will share more details as they become available. We remain focused on converting our backlog into revenue, managing our cost structure tightly as we integrate and position the combined company for sustainable growth.

Robert Ginnan: We remain focused on converting our backlog into revenue, manage our cost structure tightly as we integrate, and positioning the combined company for sustainable growth. While we are not providing specific financial guidance at this time, we expect deliveries to increase over the course of 2026 as we ramp production at Union City, convert our growing pipeline into confirmed orders. We will continue to provide visibility into our key operating metrics each quarter. With that, let me turn it back over to Scott for closing remarks.

Speaker #2: While we are not providing specific financial guidance at this time, we expect deliveries to increase over the course of 2026 as we ramp production at Union City and convert our growing pipeline into confirmed orders.

Speaker #2: We will continue to provide visibility into our key operating metrics each quarter. With that, let me turn it back over to Scott for closing remarks.

Speaker #1: Thanks, Bob. I want to leave you with the same through line that I started with: Workhorse does not need a moonshot to reach profitability.

Scott Griffith: Thanks, Bob. I want to leave you with the same through line that I started with. Workhorse does not need a moonshot to reach profitability. We need a small slice of a big underserved market that is experiencing a substantial transition. We have the plant to produce at that volume today. We have a clear plan to drive down costs to ICE comparable levels. We have a sales strategy focused on the customers and geographies most likely to act, and we are actively working to strengthen our balance sheet to fund the journey. What makes me confident is not just the plan, it's that we are already executing against it. We made three commitments at the close of the merger, and we're delivering on all three. The proof is on the road.

Speaker #1: We need a small slice of a big underserved market that is experiencing a substantial transition. We have the plant to produce at that volume today, we have a clear plan to drive down costs to ICE-comparable levels, we have a sales strategy focused on the customers and geographies most likely to act, and we are actively working to strengthen our balance sheet to fund the journey.

Speaker #1: What makes me confident is not just the plan—it's that we are already executing against it. We made three commitments at the close of the merger, and we're delivering on all three.

Speaker #1: The proof is on the road. More than 1,100 trucks, 20 million real-world miles, documented 64% operating cost savings, and repeat purchase behavior from 10 of North America's largest fleets.

Scott Griffith: More than 1,100 trucks, 20 million real-world miles, documented 64% operating cost savings, and repeat purchase behavior from 10 of North America's largest fleets. This is a working business with a clear path forward. We appreciate your continued support, and we look forward to reporting our progress. Operator, we'll now open the line for questions.

Speaker #1: This is a working business with a clear path forward. We appreciate your continued support, and we look forward to reporting our progress. Operator will now open the line for questions.

Operator 2: Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone indicates your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit to one question and one follow-up question. Our first question is from Craig Irwin with Roth Capital Partners. Please proceed.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone indicates your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit to one question and one follow-up question. Our first question is from Craig Irwin with Roth Capital Partners. Please proceed.

Speaker #3: If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone indicates your line is in the question queue.

Speaker #3: You may press star two if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker #3: We ask that you please limit to one question and one follow-up question. Our first question is from Craig Irwin with Roth Capital Partners. Please proceed.

Craig Irwin: Good evening, and thanks for taking my questions. In Q4, you obviously would have had some material one-time expenses related to closing the merger. Maybe describe what those were and break those out in a little bit of detail. You know, with that, you know, how do the $20 million in synergies cut into the P&L over the course of 2026?

Speaker #4: Good evening, and thanks for taking my questions. So, in the fourth quarter, you obviously would have had some material one-time expenses related to closing the merger.

Speaker #4: Maybe describe what those were and break those out in a little bit of detail. And with that, how did the $20 million in synergies cut in to the P&L over the course of '26?

Speaker #1: Hey, Craig, this is Bob. In the fourth quarter, we recognized a little over $4 million in what we would call one-time fees and costs associated with the merger.

Robert Ginnan: Hi, Craig, it's Bob. In Q4, we recognized a little over $4 million in what we would call one-time, you know, fees and costs associated with the merger. And then your second part of that question was, how does this lay out over the course of the year for 2026? We expect to be exiting 2026 at a $20 million run rate, and some of those are immediate. You know, we made several personnel changes right away, and then some of them take a little more time as we migrate work into the Union City facility. We're on track and well within that process right now.

Speaker #1: And then your second part of that question was, how does this lay out over the course of the year for 2026? We expect to be exiting 2026 at a $20 million run rate, and some of those are immediate. We made several personnel changes right away.

Speaker #1: And then some of them take a little more time as we migrate work into the Union City facility. But we're on track, and well within that process right now.

Craig Irwin: If that is actually.

Speaker #1: Oh, Craig, I was just going to add to Scott here. It's good to chat with you. So the primary sources, there's really four of them in those net $20 million. The biggest first chunk comes from the manufacturing consolidation.

Scott Griffith: Oh, Craig, I was just gonna add to Scott here. Good to chat with you. The primary sources, there's really four of them in that $20 million. The biggest first chunk comes from the manufacturing consolidation. We're exiting the facility. Actually, today is the last day for the Motiv facility, turns out, moving everything down into Indiana. The second part is significant headcount reductions. Most of that's in SG&A and R&D, consolidating the teams, if you will. Then the third is, you know, things like professional fees, insurance, marketing costs, just redundant costs that both companies were spending. We've cut, you know, we've already cut a lot of that out. The rest is primarily some facility reductions, consolidating into fewer spaces, with a smaller team.

Speaker #1: We're exiting the facility. Actually, today is the last day for the motor facility. Turns out, we're moving everything down into Indiana. Significant—the second part's significant—headcount reductions.

Speaker #1: Most of that's in SG&A and R&D, consolidating the teams, if you will. And then the third is things like professional fees, insurance, marketing costs—just redundant costs that both companies were spending.

Speaker #1: And so, we've already cut a lot of that out. And then the rest is primarily some facility reductions—consolidating into fewer spaces, with a smaller team.

Speaker #1: So those are the four big components we remain quite confident on the $20 million. We'll exit the year at a run rate of about $20 million in savings.

Scott Griffith: Those are the four big components. We remain, you know, quite confident on the $20 million. We'll exit the year at a run rate of about $20 million in savings. We're excited about that. That does not include any supply chain savings, by the way. We didn't try to factor that in 'cause there's been a lot of moving parts, as you can imagine, in the supply chain world, so with tariffs and so forth. We think there's more there, and we'll come back in future quarters with some of the estimates on that front.

Speaker #1: And so we're excited about that. That does not include any supply chain savings, by the way. We didn't try to factor that in because there's been a lot of moving parts, as you can imagine, in the supply chain world.

Speaker #1: So, with tariffs and so forth, we think there's more there, and we'll come back in future quarters with some of the estimates on that front.

Speaker #4: Okay, excellent. And then, with the significant change in your manufacturing footprint, would you be optimistic about reaching positive gross margins on your revenue by the fourth quarter of this year?

Craig Irwin: Okay. Excellent. With the significant change in your manufacturing footprint, would you be optimistic about reaching positive gross margins on your revenue by Q4 this year?

Speaker #1: So, Craig, I think no. I don't think we're quite there for the fourth quarter of this year. Obviously, it's more near-in as we continue to put volume in there.

Scott Griffith: Craig, I think, no, I don't think we're quite there for Q4 this year. Obviously, it's more near-term as we continue to put volume in there, but it probably won't be in 2026. Yeah. Understood. Thanks again for taking my questions. Thanks, Craig.

Scott Griffith: Craig, I think, no, I don't think we're quite there for Q4 this year. Obviously, it's more near-term as we continue to put volume in there, but it probably won't be in 2026.

Speaker #1: But it probably won't be in 2026.

Speaker #4: Yes. Understood. Thanks again for taking my questions.

Craig Irwin: Yeah. Understood. Thanks again for taking my questions.

Speaker #1: Thanks, Craig.

Scott Griffith: Thanks, Craig.

Speaker #3: Our next question is from Ben Sommers ers with BTIG. Please proceed.

Operator 2: Our next question is from Ben Somers with BTIG. Please proceed.

Operator: Our next question is from Ben Somers with BTIG. Please proceed.

Speaker #5: Hey, yeah. Good afternoon and thanks for taking my question. So I kind of wanted to ask on the step van market here and just your outlook there.

Ben Somers: Hey, yeah, good afternoon, and thanks for taking my question. Kind of wanted to ask on the step van market here and just your outlook there, and then I guess any kind of preliminary feedback we've gotten on the new lower cost model.

Ben Summers: Hey, yeah, good afternoon, and thanks for taking my question. Kind of wanted to ask on the step van market here and just your outlook there, and then I guess any kind of preliminary feedback we've gotten on the new lower cost model.

Speaker #5: And then, I guess, any kind of preliminary feedback we've gotten on the new lower-cost model.

Speaker #1: Yeah. The preliminary feedback on the new lower-cost models really good, both from dealers and directly from buyers. And so I think we'll probably be able to give you some news on some of the feedback in the next few weeks on that because we've had a lot of really positive feedback.

Scott Griffith: Yeah, the preliminary feedback on the new lower cost models are really good, both from dealers and directly from buyers. I think we'll probably be able to give you some news on some of the feedback in the next few weeks on that because we've had a lot of really positive feedback. In large part, that was a kind of expected reaction. We've spent a lot of time talking to dealers, to our customers to really understand the duty cycle of the step vans. What they told us is, we love the W56 as is. What we also need is a complementary lower cost vehicle that is, maybe, has a little less payload, doesn't need to go as far per day, but we can spend less on it.

Speaker #1: In large part, that was a kind of expected reaction. We'd spent a lot of time talking to dealers, to our customers, to really understand the duty cycle of the step vans, and what they told us is, "We love the W56 as is, but what we also need is a complementary, lower-cost vehicle that maybe has a little less payload, doesn't need to go as far per day, but we can spend less on it."

Speaker #1: And so they're mixing these together now as the plan so that longer routes will take the current W56, shorter routes, smaller payload operations will take the new smaller vehicle.

Scott Griffith: They're mixing these together now is the plan, so that longer routes will take the current W56, shorter routes, smaller payload operations will take the new smaller vehicle. We're continuing to see other opportunities just like that in the step van world to continue to tweak our product line up. We think that that'll be a real benefit. Sorry, what was the other part of your question?

Speaker #1: And we're continuing to look at—we see other opportunities just like that in the step van world to continue to tweak our product lineup.

Speaker #1: So we think that'll be a real benefit. And, sorry, what was the other part of your question?

Speaker #5: I know—that was kind of my next question—was just a little bit on the plant capacity. So, I know you guys mentioned that there's just minimal work to be done there.

Ben Somers: I know that was it. Then kind of my next question was just a little bit on the plant capacity. I know you guys mentioned that there's just minimal work to be done there. I guess if you just give any more color on kind of what we need to do to get to that 5,000+ capacity. I know you guys mentioned that's pretty much minimal CapEx there, so just kind of curious what's left to be done.

Ben Summers: I know that was it. Then kind of my next question was just a little bit on the plant capacity. I know you guys mentioned that there's just minimal work to be done there. I guess if you just give any more color on kind of what we need to do to get to that 5,000+ capacity. I know you guys mentioned that's pretty much minimal CapEx there, so just kind of curious what's left to be done.

Speaker #5: I guess if you just give them any more color on kind of what we need to do to get to that 5,000-plus capacity, I know you guys mentioned that's pretty much minimal CapEx x there.

Speaker #5: So, just kind of curious—what's left to be done?

Speaker #1: Yeah. So Ben, I think if you look at the total capacity, we're in pretty good shape. Foreseeable future. And the minimal-type capacity to get to 5,000 might be more things like lift, equipment, and torque guns, that type of thing.

Scott Griffith: Yeah, Ben, I think if you look at the total capacity, we're in pretty good shape for the foreseeable future, and the minimal CapEx to get to 5,000 might be more things like lift equipment and torque guns, that type of thing. It is very minimal. I think as we expand products, those may drive capital expenditures, but those products would be incremental revenue and driving their own separate ROI. Yeah, maybe slightly more specific to Ben. It's a good question. Think about the, you know, December, the state of the Union City facility had a single line operating W56 production. In Q1, we've completely relocated now our former line in Detroit metro area from Motiv.

Speaker #1: So it is very, very minimal. I think as we expand products, those may drive capital expenditures. But those products would be incremental revenue in driving their own separate ROI.

Speaker #6: Yeah. Maybe slightly more specific too, Ben. It's a good question. Think about the December state of the Union City facility. Had a single line operating W56 production.

Speaker #6: In the first quarter, we've completely relocated now our former line in the Detroit metro area from Motive. So the Motive chassis and powertrain have now been moved over there.

Scott Griffith: The Motiv chassis and powertrain has now been moved over there. That's the second line. We're adding a third line right now, which will come up in Q2, which is our Class 4 truck. All three of those lines will be operating within the same facilities. Think of a lot more production, a lot more revenue potential off of exactly the same footprint and very little additional capital.

Speaker #6: And then we're—so that's a second line. We're adding a third line right now, which will come up in Q2, which is our Class 4 truck.

Speaker #6: And so, all three of those lines will be operating within the same facilities. So, think of a lot more production, a lot more revenue potential off exactly the same footprint, and very little additional capital.

Speaker #1: Awesome. Thank you guys for the update. And thanks for taking my questions.

Ben Somers: Awesome. Thank you guys for the update. Now, thanks for taking my questions.

Ben Summers: Awesome. Thank you guys for the update. Now, thanks for taking my questions.

Speaker #4: Thanks, Ben.

Scott Griffith: Thanks, Ben.

Speaker #3: As a reminder, this is Star One on your telephone keypad. If you would like to ask a question, our next question is from Mike Schlitzke with DA Davidson.

Operator 2: As a reminder to star one on your telephone keypad if you would like to ask a question. Our next question is from Mike Shlisky with D.A. Davidson. Please proceed.

Operator: As a reminder to star one on your telephone keypad if you would like to ask a question. Our next question is from Mike Shlisky with D.A. Davidson. Please proceed.

Speaker #3: Please proceed.

Speaker #7: Hello. Thanks for taking my thanks for taking my questions here. I wanted to just thank hey, guys. I wanted to just a quick step back and you mentioned that Motive, the Motiv product is now in the Union City facility.

Michael Shlisky: Hello. Thanks for taking my questions here.

Scott Griffith: Hi, Mike.

Michael Shlisky: Hey, guys. I wanted to take a quick step back and you've mentioned that Motiv, the Motiv product is now in the Union City facility. Going forward, how will the Workhorse product and the Motiv product differ in the eyes of the customer? Trying to figure out, like, what will the builds be in 2026? More of the Motiv, more of the Workhorse, or more of the Class 4?

Speaker #7: Going forward, how will the workhorse product and the Motiv product differ in the eyes of the customer? I'm trying to figure out what will the builds be in 2026, more the Motive, more the workhorse, or more the Class 4?

Speaker #1: So, it will be— that's a great question. We'll be sunsetting the former Class 5, 6 chassis from the Motiv side. We've got some orders.

Scott Griffith: That's a great question. We'll be sunsetting the former Class 5, 6 chassis from the Motiv side. We've got some orders. We came into the year with a firm order backlog for a number of those orders, one of which was, you know, we talked about yesterday, the Purolator order. Once those are behind us, as we progress through this year, we will wind down that line, but we'll be ramping up new lines for our Class 5, 6 cab chassis, and also complementing that with the Class 4 line that I mentioned a few minutes ago. We anticipate having at least 3 lines running there going forward.

Speaker #1: We came into the year with a firm order backlog for a number of those orders, one of which was—we talked about it yesterday—the Purolator order.

Speaker #1: Once those are behind us, as we progress through this year, we will wind down that line. And but we'll be ramping up new lines for our Class 5, 6 cab chassis and also complementing that with the Class 4 line that I mentioned a few minutes ago.

Speaker #1: So we'll always we anticipate having at least three lines running there. Going forward, we've got two of three up now, three by the end of Q2.

Scott Griffith: We've got 2 of 3 up now, 3 by the end of Q2, and then we'll be moving one of those, you know, more offline at the end of this year and bringing up the new Class 5, 6 cab chassis line. We're gonna continue to see a lot of activity and transition there through this year. You know, obviously the goal is to leverage the fixed cost structure as much as we can in that facility.

Speaker #1: And then we'll be moving one of those more offline at the end of this year and bringing up the new Class 5, 6 cab chassis line.

Speaker #1: So we're going to continue to see a lot of activity and transition there through this year. But obviously, the goal is to leverage the fixed-cost structure as much as we can, and that facility.

Speaker #7: Got it. Thanks for that. And my other question was around the bill of materials. You were kind of deferred on the supply chain potential and the synergies that might be above and beyond what you have out there for the $20 million.

Michael Shlisky: Got it. Thanks for that. My other question was around the bill of materials. You had kind of deferred on the supply chain potential and the synergies that might be above and beyond what you had out there for the $20 million. I'm curious as to, you know, give us a ballpark or just some basic guidepost as to, I'm not sure how you plan to reduce the bill of materials during 2026 and whether supply chain is, you know, can that be brought under control by the end of the year?

Speaker #7: But I'm curious as to, give us a ballpark or just some basic guideposts as to how much or how you plan to reduce the bill of materials during 2026, and whether the supply chain—can that be brought under control by the end of the year?

Speaker #1: Yeah, so think of sort of two—another really good question. Think of at least two primary areas we're focused on in that regard.

Scott Griffith: Yeah. Think of at least two primary areas we're focused on in that regard. One is, as we go through our product roadmap and our so-called cycle plan, think of batteries, most of the components of the powertrain, braking systems, even chassis rails, et cetera. The more we can commonize those parts from Class 4 to 5 to 6, especially the electronics and battery side, the more leverage we're gonna get on the supply chain side. We're also gonna reduce the number of parts we have to stock.

Speaker #1: One is as we go through our product roadmap and our so-called cycle plan, think of batteries, most of the components of the powertrain, braking systems, even chassis rails, etc.

Speaker #1: The more we can commonize those parts from Class 4 to Class 5 to Class 6, especially on the electronics and battery side, the more leverage we're going to get on the supply chain side.

Speaker #1: We're also going to reduce the number of parts we have to stock. And the reason we haven't given you an estimate on that yet is we're still working our way through.

Scott Griffith: The reason we haven't given you an estimate on that yet is we're still working our way through, you know, what that future state looks like 12 months from now when we've got a common set of batteries, a common set of electric motors, common set of brakes, common set of other systems across all three of these classes of trucks now. That's a big one. We'll come back as the year progresses with, you know, tighter estimates on where we think that goes. Our ultimate goal, and we see a path to get there, is to get down to a BOM structure that can support pricing that's competitive with ICE trucks. That's obviously a significant drop from where we are now, both on BOM and price.

Speaker #1: What does that future state look like 12 months from now, when we've got a common set of batteries, a common set of electric motors, a common set of brakes, and a common set of other systems across all three of these classes of trucks now?

Speaker #1: So that's a big one. And we'll come back as the year progresses with tighter estimates on where we think that goes. But our ultimate goal, and we see a path to get there, is to get down to a BOM structure that can support pricing that's competitive with ICE trucks.

Speaker #1: So, and that's obviously a significant drop from where we are now—both on BOM and price. The W5, 6, 140-kilowatt launch last week is an example of that.

Scott Griffith: The W56 140 kW launch last week is an example of that. That has less battery power and has a lower BOM. We're immediately dropping price on those, and that allows us to maintain our margin. Our last big feature is volume. As we drive more volume, 3 lines, more volume per line through that plant, you'll see, you know, our cost structure come down with the BOM, the build cost itself, on the manufacturing cost side. I don't know, Bob, if you wanna add any more to that.

Speaker #1: That's a cheaper that has less battery power and much, and has a lower BOM. So we're immediately dropping price on those, and that allows us to maintain our margin.

Speaker #1: And then the last big feature is volume. As we drive more volume three lines, more volume per line, through that plant, you'll see our cost structure come down with the bomb.

Speaker #1: The build cost itself, on the manufacturing cost side. So, I don't know, Bob, if you want to add any more to that.

Speaker #8: Yeah. That was good, Scott.

Robert Ginnan: No, that was good, Scott.

Speaker #7: Great. Thank you. I appreciate the color.

Michael Shlisky: Great. Thank you. I appreciate the color.

Speaker #4: Thanks, Mike.

Scott Griffith: Thanks, Mike.

Speaker #1: Thanks, Mike.

Scott Griffith: Thanks, Mike.

Speaker #3: We have reached the end of our question and answer session. I would like to turn the conference back over to Scott for closing remarks.

Operator 2: We have reached the end of our question-and-answer session. I would like to turn the conference back over to Scott for closing remarks.

Operator: We have reached the end of our question-and-answer session. I would like to turn the conference back over to Scott for closing remarks.

Speaker #1: We want to thank everybody for coming in today, and give everyone a sense for how excited we are going forward with the company. We'll welcome you back at the end of next quarter.

Scott Griffith: We wanna thank everybody for coming in today and give everyone a sense for how excited we are going forward with the company. We welcome you back at the end of next quarter. We're happy to report more after that. We've shipped quite a few units in Q1. We'll talk more about that in the coming weeks. We're continuing to see, you know, our firm order backlog build since the closing of the merger. You know, we really see some great blue sky ahead and look forward to telling you more about the company's progress in future quarters. Thanks very much.

Speaker #1: We're happy to report more after that. We've shipped quite a few units. In the first quarter, we'll talk more about that. In the coming weeks, and we're continuing to see our firm order backlog build since the closing of the merger.

Speaker #1: So, we really see some great blue sky ahead and look forward to telling you more about the company's progress in future quarters. Thanks very much.

Operator 2: This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

Operator: This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

Q4 2025 Workhorse Group Inc Earnings Call

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