DEFA14A: Workhorse, Motiv Merge to Create EV Truck Powerhouse

Workhorse Group Inc. announced a definitive merger agreement with Motiv Power Systems, Inc. to form a leading North American medium-duty electric truck OEM, alongside immediate financial strengthening actions.

Summary

• Workhorse Group Inc. has agreed to combine with Motiv Electric Trucks, a leading manufacturer of medium-duty, zero-emission electric trucks and buses, via a merger agreement dated August 15, 2025.
• The merger aims to create a leading North American medium-duty electric truck OEM with a broader product portfolio, including Class 4 cab chassis and Class 5 and 6 step vans, with a path to develop Class 5 and 6 cab chassis.
• Workhorse completed a sale leaseback transaction for its Union City facility ('The Ranch') and received new immediate financing to strengthen its financial position and fund operations.
• The combined company expects to deliver lower unit costs to customers by leveraging combined scale and strengths, aiming to compete more effectively with pure-play electric and legacy OEMs.
• Motiv's controlling investor will become the majority owner of the combined company, with Workhorse shareholders retaining a significant equity stake.
• The transaction is expected to close in the fourth quarter of 2025, with Workhorse and Motiv operating independently until then.
• Scott Griffith, Motiv's CEO, is expected to lead the combined company, while Rick Dauch, Workhorse's current CEO, expects to serve as an advisor.
• Workhorse announced positive second-quarter earnings results, reflecting progress in its product roadmap, particularly with the W56 vehicle.

Sentiment

Score: 8

Explanation: The filing presents a highly positive outlook on the merger, framing it as a transformative and strengthening move despite acknowledging market challenges. The immediate financial actions and positive Q2 results contribute to a strong positive sentiment regarding the company's strategic direction and future prospects.

Positives

• Creation of a leading North American medium-duty electric truck OEM through the merger with Motiv.
• Expanded product portfolio to include Class 4 cab chassis and Class 5 and 6 step vans, with a clear path to Class 5 and 6 cab chassis.
• Strengthened financial position immediately and for the longer-term through a sale leaseback of the Union City facility and new immediate financing.
• Expected lower unit costs for customers by leveraging combined scale and strengths, enhancing competitiveness.
• Combined company will benefit from Workhorse's national dealer network, proven vehicles, and manufacturing capabilities, alongside Motiv's diverse product portfolio and top fleet relationships.
• Anticipated continued opportunities for career growth and new opportunities for employees within the stronger combined company.
• Reported important progress in advancing the product roadmap, reflected in positive second-quarter earnings results.

Negatives

• Shifts in the political landscape and delayed customer adoption have caused gaining traction to take longer than expected in the commercial EV transition.
• Motiv's controlling investor will become the majority owner of the combined company, potentially diluting Workhorse shareholders' control.
• The combined company will seek to raise additional equity financing post-merger, which could lead to further shareholder dilution.
• The transaction is subject to shareholder approval and regulatory consents, with risks of conditions not being satisfied or termination.

Risks

• Ability of the parties to successfully integrate their businesses and technologies, potentially leading to less effective and efficient operations than expected.
• Risk that expected benefits and synergies of the proposed transaction may not be fully achieved in a timely manner, or at all.
• Workhorse's ability to obtain shareholder approval required to consummate the proposed transaction and the timing of the closing.
• Risk that any regulatory approval, consent, or authorization required for the proposed transaction is not obtained or is obtained with unanticipated conditions.
• Occurrence of any event, change, or circumstance that could lead to the termination of the proposed transaction.
• Unanticipated difficulties, liabilities, or expenditures relating to the transaction.
• Effect of the announcement, pendency, or completion of the proposed transaction on business relationships and operations.
• Effect of the announcement or pendency of the proposed transaction on Workhorse's common stock prices and uncertainty regarding the long-term value of the combined company's common stock.
• Risks that the proposed transaction disrupts current plans and operations and potential difficulties in hiring or retaining employees.
• Ability to develop and manufacture the product portfolio, including W4 CC, W750, and W56 programs.
• Ability to attract and retain customers for existing and new products.
• Ongoing and anticipated changes in the U.S. political environment, including those from the new Presidential Administration and changes to regulatory agencies.
• Implementation of changes to the existing tariff regime by the new Presidential Administration and responsive measures by foreign governments.
• Risks associated with obtaining orders and executing upon such orders.
• Unavailability, reduction, elimination, or adverse application of government subsidies and incentives, or challenges to regulations like the California Air Resource Board's Advanced Clean Fleet regulation.
• Changes in attitude toward environmental, social, and governance matters among regulators, investors, and business partners.
• Supply chain disruptions, including constraints on steel, semiconductors, and other material inputs, and resulting cost increases.
• Limited operations and need to expand and enhance production processes to fulfill product orders.
• General inability to raise additional capital to fund operations and business plan.
• Ability to receive sufficient proceeds from current and future financing arrangements to meet immediate liquidity needs, and potential costs, dilution, and restrictions from such financing.
• Ability to maintain compliance with Nasdaq listing requirements and the impact of steps taken, such as reverse stock splits.
• Ability to protect intellectual property.
• Market acceptance of products.
• Ability to obtain sufficient liquidity from operations and financing activities to continue as a going concern, and ability to control expenses.
• Effectiveness of cost control measures and their impact on operations, including employee furloughs.
• Potential competition, including shifts in technology.
• Volatility in and deterioration of national and international capital markets and economic conditions.
• Global and local business conditions, acts of war (including conflicts in Ukraine and the Middle East), and/or terrorism.
• Prices charged by competitors.
• Inability to retain key members of the management team.
• Inability to satisfy customer warranty claims.
• Outcome of any regulatory or legal proceedings, including with Coulomb Solutions Inc.
• Ability to realize the benefits of the sale and leaseback transaction of the Union City Facility.

Future Outlook

The merger with Motiv is expected to close in the fourth quarter of 2025, creating a combined company led by Motiv's CEO, Scott Griffith. Workhorse's current CEO, Rick Dauch, will transition to an advisory role. The combined entity plans to seek additional equity financing post-merger to support long-term growth and will continue advancing its product roadmap and serving customers. An integration team will be established to prepare for the close.

Management Comments

• "I am pleased to let you know that today, we have agreed to combine with Motiv Electric Trucks to create a leading North American medium-duty electric truck OEM."
• "We are also taking several actions that will strengthen our financial position for the nearand long-term."
• "Thanks to the hard work and dedication of the Workhorse team, we have made important progress advancing our product roadmap, which is reflected in our second quarter earnings results we also announced this morning."
• "Shifts in the political landscape and delayed customer adoption have made gaining traction take longer than expected."
• "We believe we are on the best path forward for Workhorse, our people and our shareholders."
• "With Motiv, we are creating a leader positioned for rapid innovation and scalable growth."
• "The actions we are taking strengthen our financial position immediately and for the longer-term."
• "Following the completion of the transaction, we will seek to raise additional equity financing to fuel our long-term growth plans."
• "Scott Griffith, Motivs CEO, is expected to lead the combined company. My focus going forward is leading Workhorse to complete the transaction while we continue advancing our roadmap and serving customers. Thereafter, I expect to serve as an advisor to the combined company."
• "I strongly believe this is a terrific outcome for Workhorse and our team, and I am excited about Workhorses future with Motiv. Together, we will be even better positioned to win the commercial EV transition."

Industry Context

This merger positions the combined Workhorse-Motiv entity to be a stronger competitor in the evolving commercial electric vehicle (EV) market. The move addresses challenges like delayed customer adoption and political landscape shifts, aiming to leverage combined scale and product offerings to compete more effectively against both pure-play EV manufacturers and established legacy OEMs in the medium-duty segment. The focus on lower total cost of ownership (TCO) for customers aligns with broader industry trends emphasizing economic viability for fleet electrification.

Comparison to Industry Standards

• The combined entity aims to compete more effectively with both pure-play electric OEMs and legacy OEMs in the medium-duty electric truck segment. Specific comparable companies or projects are not detailed in the filing.
• The strategy to achieve lower unit costs through combined scale and strengths is a common industry approach to gain competitive advantage in a capital-intensive market.
• The expansion of the product portfolio to include Class 4 cab chassis and Class 5 and 6 step vans, with a path to Class 5 and 6 cab chassis, positions the company to address a broader range of customer needs within the medium-duty segment, similar to diversified offerings seen from larger industry players.

Management Changes

Corporate Governance

Legal Proceedings

• The outcome of any regulatory or legal proceedings, including with Coulomb Solutions Inc., is listed as a risk factor that could materially affect actual results.

Stakeholder Impact

• **Shareholders:** Will maintain a significant equity stake in the combined company, but Motiv's controlling investor will become the majority owner. They will also vote on the merger and face potential dilution from future equity financing.
• **Employees:** Expected to have continued opportunities for career growth and new opportunities within the stronger combined company. An integration team will be formed.
• **Customers:** Expected to benefit from a broader product portfolio, lower unit costs, and continued high-quality services and proven products.
• **Partners (Motiv):** Motiv's diverse product portfolio and top fleet relationships will be integrated, and its CEO will lead the combined entity.
• **Creditors:** The sale leaseback and new immediate financing are intended to strengthen the financial position and address the balance sheet, potentially improving creditworthiness.

Next Steps

• Workhorse and Motiv will continue to operate as independent companies until the transaction closes.
• An integration team, comprising leaders from both companies, will be established to develop an integration plan.
• Workhorse will file a Proxy Statement on Schedule 14A with the SEC for shareholder approval of the proposed transaction.
• Workhorse CEO Rick Dauch will host a town hall meeting on August 15, 2025, at 11:00 AM, and a meeting at the Union City facility on Monday at 8:00 AM for plant employees.
• The transaction is expected to close in the fourth quarter of 2025.

Key Dates

Recommendation

The merger with Motiv and the associated financial strengthening actions represent a significant strategic pivot for Workhorse, addressing market challenges and aiming for scalable growth. While the immediate financial news (Q2 results, new financing) is positive and the strategic rationale for combining with Motiv is sound, there are substantial integration risks, potential future dilution from equity raises, and ongoing market uncertainties in the commercial EV space. A seasoned investor would likely 'hold' to observe the execution of the merger, the integration process, and the impact of future capital raises before making a more definitive investment decision.

Keywords

Electric Trucks, Commercial EV, Merger, Workhorse Group, Motiv Power Systems, Medium-Duty Trucks, Zero-Emission Vehicles, Fleet Electrification, EV OEM, Financial Restructuring