DEFA14A: Workhorse, Motiv Merge to Form EV Truck Leader

Workhorse Group Inc. and Motiv Electric Trucks have entered into a definitive merger agreement to create a leading North American medium-duty electric truck OEM.

Summary

• Workhorse Group Inc. and Motiv Electric Trucks have executed a definitive merger agreement to combine, creating a leading North American medium-duty electric truck OEM.
• The transaction is an all-stock merger, valuing the combined company at approximately $105 million.
• Upon completion, Motiv's controlling investor will own approximately 62.5% of the combined company on a fully diluted basis.
• Workhorse shareholders will maintain approximately 26.5% equity stake, and Workhorse's existing senior secured lender will have rights to receive common stock representing approximately 11%.
• Workhorse completed a $20 million sale leaseback of its Union City plant and obtained $5 million in convertible note financing in connection with the merger agreement.
• Scott Griffith, Motiv CEO, is expected to serve as CEO of the combined company, while Rick Dauch, Workhorse CEO, will serve as an advisor.
• The combined company anticipates achieving at least $20 million in cost synergies by the end of 2026, through reductions in R&D, G&A, and facility costs.
• Motiv's controlling investor will provide $20 million in debt financing at closing, comprising a $10 million revolving credit facility and a $10 million ABL facility.
• The transaction is expected to close in the fourth quarter of 2025, subject to Workhorse shareholder approval and other customary closing conditions.

Sentiment

Score: 8

Explanation: The merger is a significant strategic move expected to create a stronger, more competitive entity in the medium-duty EV market, with clear financial benefits like cost synergies and improved liquidity. While Workhorse shareholders face dilution, the overall outlook for the combined entity appears positive due to enhanced scale and market positioning.

Positives

• The merger creates a leading North American medium-duty electric truck OEM, combining Workhorse's manufacturing and dealer network with Motiv's product portfolio and fleet relationships.
• The combined entity is expected to benefit from increased scale, an expanded product portfolio (Class 4-6 trucks), and enhanced operational efficiencies, leading to lower unit costs and optimized Total Cost of Ownership (TCO) for customers.
• The transaction strengthens the combined company's financial profile with a simplified capital structure and improved liquidity, including $20 million from a sale leaseback and $5 million from a convertible note.
• Potential for at least $20 million in cost synergies by the end of 2026, enhancing profitability.
• The combined company has served 10 of the largest medium-duty fleets in North America, positioning it for expanded adoption through existing relationships.
• Workhorse's Union City facility has the capacity to produce up to 5,000 trucks per year, providing scalable manufacturing capabilities.
• Motiv's controlling investor is committing $20 million in debt financing at closing, providing crucial capital for operations and growth.

Negatives

• Workhorse shareholders will experience significant dilution, owning approximately 26.5% of the combined company on a fully diluted basis.
• The existing senior secured lender will have rights to receive common stock representing approximately 11%, further contributing to dilution.
• The combined company will need to raise additional equity financing post-close to fund its strategic execution, which could lead to further dilution.
• The transaction is subject to Workhorse shareholder approval and other customary closing conditions, introducing uncertainty regarding its completion.

Risks

• Ability to successfully integrate the businesses and technologies of Workhorse and Motiv, which may result in the combined company not operating as effectively and efficiently as expected.
• Risk that the expected benefits and synergies of the proposed transaction, including at least $20 million in cost synergies, may not be fully achieved in a timely manner, or at all.
• Workhorse's ability to obtain the approval of its shareholders required to consummate the proposed transaction.
• The timing of the closing of the proposed transaction, including the risk that the conditions to the transaction are not satisfied on a timely basis or at all, or the failure of the transaction to close for any other reason or to close on the anticipated terms.
• The risk that any regulatory approval, consent, or authorization that may be required for the proposed transaction is not obtained or is obtained subject to conditions that are not anticipated.
• The occurrence of any event, change, or other circumstance that could give rise to the termination of the proposed transaction.
• Unanticipated difficulties, liabilities, or expenditures relating to the transaction.
• The effect of the announcement, pendency, or completion of the proposed transaction on the parties' business relationships and business operations generally.
• The effect of the announcement or pendency of the proposed transaction on Workhorse's common stock prices and uncertainty as to the long-term value of the combined company's common stock.
• Risks that the proposed transaction disrupts current plans and operations of the parties and their respective management teams and potential difficulties in hiring or retaining employees as a result of the proposed transaction.
• Ability to develop and manufacture the product portfolio, including the W4 CC, W750, and W56 and other programs.
• Ability to attract and retain customers for existing and new products.
• Ongoing and anticipated changes in the U.S. political environment, including those resulting from the new Presidential Administration, control of Congress, and changes to regulatory agencies.
• The implementation of changes to the existing tariff regime by the new Presidential Administration and measures taken in response to such tariffs by foreign governments.
• Risks associated with obtaining orders and executing upon such orders.
• The unavailability, reduction, elimination, or adverse application of government subsidies and incentives or any challenge to or failure by the federal government, states, or other governmental entities to adopt or enforce regulations such as the California Air Resource Board's Advanced Clean Fleet regulation.
• Changes in attitude toward environmental, social, and governance matters among regulators, investors, and parties with which the company does business.
• Supply chain disruptions, including constraints on steel, semiconductors, and other material inputs and resulting cost increases impacting the company, its customers, its suppliers, or the industry.
• Limited operations and need to expand and enhance elements of the production process to fulfill product orders.
• General inability to raise additional capital to fund operations and business plan.
• Ability to receive sufficient proceeds from current and any future financing arrangements to meet immediate liquidity needs and the potential costs, dilution, and restrictions resulting from any such financing.
• Ability to maintain compliance with the listing requirements of the Nasdaq and the impact of any steps taken, including reverse splits of common stock, on operations, stock price, and future access to funds.
• 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 control expenses.
• The effectiveness of cost control measures and impact such measures could have on operations, including the effects of furloughing employees.
• Potential competition, including without limitation 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 without limitation the conflicts in Ukraine and the Middle East) and/or terrorism.
• The prices being charged by competitors.
• Inability to retain key members of the management team.
• Inability to satisfy customer warranty claims.
• The 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 combined company anticipates becoming a leader in the medium-duty electric truck segment, leveraging increased scale, an expanded product portfolio, and enhanced operational efficiencies to achieve lower unit costs and optimize total cost of ownership for customers. It expects to strengthen its financial profile, simplify its capital structure, and pursue additional equity financing post-closing to fund strategic execution. The merger aims to achieve at least $20 million in cost synergies by the end of 2026 and capitalize on the transition to clean energy.

Management Comments

• Scott Griffith, CEO of Motiv, stated: "Bringing together two leading OEMs in the medium-duty space strengthens our ability to reduce the cost of electric trucks and make the total cost of ownership even more compelling. We believe this is a coming-of-age moment—not just for Motiv and Workhorse, but for the industry as a whole, and that widespread adoption of medium-duty electric trucks will come from achieving cost parity vs. ICE and diesel trucks and offering compelling long-term value. That’s exactly what we’re focused on delivering with this merger, and with a combined more than 17 million miles under our belt, we believe the transaction will put us in a strong starting position to deliver on this vision."
• Rick Dauch, CEO of Workhorse, commented: "This transaction represents a significant milestone for Workhorse, our customers, our stakeholders and our shareholders. By combining with Motiv and completing the related transactions, we are creating a broader product offering, strengthening our nearand long-term financial position and providing Workhorse shareholders with the opportunity to participate in the upside of a leader in the medium-duty EV commercial vehicle market. We believe Motiv is the right partner to support the advancement of our combined product roadmap and capture new growth opportunities. Together, we are confident we will be even better positioned to win the commercial EV transition and create value for shareholders."

Industry Context

This merger occurs within a rapidly evolving commercial electric vehicle market, particularly the medium-duty truck segment, which is projected to be a $23 billion market in 2025. The combination of Workhorse's manufacturing and dealer network with Motiv's diverse product portfolio and fleet relationships positions the new entity to compete more effectively against both pure-play EV and legacy OEMs. The focus on achieving cost parity with internal combustion engine (ICE) and diesel trucks, alongside optimizing Total Cost of Ownership (TCO), aligns with broader industry trends towards decarbonization and fleet electrification driven by increasingly stringent emissions standards and corporate ESG pledges.

Comparison to Industry Standards

• The filing states the combined company will compete more effectively with the industry's pure-play electric and legacy OEMs, but does not name specific comparable companies or projects.
• It highlights a combined more than 17 million miles under their belt, suggesting significant real-world testing and operational experience, which is a strong indicator of product maturity in the EV sector.
• The strategic goal of achieving cost parity versus ICE and diesel trucks and offering compelling long-term value is a key industry benchmark for widespread EV adoption and competitive positioning.

Management Changes

Legal Proceedings

• The filing mentions risks related to the outcome of any regulatory or legal proceedings, including with Coulomb Solutions Inc., as a general risk factor, but does not detail new or ongoing proceedings directly related to the merger itself.

Related Party Transactions

• Workhorse completed a $20 million sale leaseback transaction for its Union City, Indiana manufacturing facility with an entity affiliated with Motiv's controlling investor.
• Workhorse obtained a $5 million secured, convertible note financing from an entity affiliated with Motiv's controlling investor.
• Entities affiliated with Motiv's controlling investor will provide $20 million in debt financing at the completion of the transaction.

Stakeholder Impact

• **Shareholders (Workhorse):** Will hold approximately 26.5% of the combined company, experiencing dilution but gaining exposure to a larger, more diversified EV entity with potential for long-term growth.
• **Shareholders (Motiv's controlling investor):** Will become the majority owner (approximately 62.5%) of the combined company, gaining significant control and upside potential.
• **Customers:** Expected to benefit from a broader product portfolio, enhanced operational efficiencies, lower unit costs, and optimized Total Cost of Ownership (TCO) for medium-duty electric trucks.
• **Employees:** Potential for integration challenges and changes in organizational structure, but also opportunities within a larger, more scaled and financially strengthened company.
• **Creditors:** Workhorse's existing senior secured lender's indebtedness will be repaid and/or cancelled at closing, with new secured indebtedness provided by Motiv's controlling investor.

Next Steps

• Workhorse intends to file a Proxy Statement on Schedule 14A with the SEC.
• Workhorse shareholders will need to approve the proposed transaction.
• The transaction is expected to close in the fourth quarter of 2025.
• A joint conference call will be held on August 19, 2025, to discuss the proposed transaction and Workhorse's second quarter 2025 financial results.
• The combined company will seek to raise additional equity financing post-close.
• Integration of Workhorse and Motiv businesses and technologies will commence post-merger.
• Efforts will be made to achieve at least $20 million of cost synergies by the end of 2026.

Key Dates

Recommendation

The merger creates a more scaled and diversified entity in the growing medium-duty EV market, offering potential for long-term value creation through synergies and an expanded product line. However, Workhorse shareholders face significant dilution, and the success hinges on effective integration and execution of cost synergies. The need for additional equity financing post-close also introduces future uncertainty. A 'hold' recommendation allows investors to observe the integration process and initial performance of the combined entity before making further investment decisions.

Keywords

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