DEFA14A: Workhorse & Motiv Merger: EV Market Power Play

Workhorse Group Inc. announces a definitive merger agreement with Motiv Power Systems, Inc. to create a leading medium-duty electric truck company.

Summary

• Workhorse Group Inc. and Motiv Power Systems, Inc. have entered into an Agreement and Plan of Merger, dated August 15, 2025.
• The merger aims to create a leading commercial electric vehicle (EV) company focused on medium-duty electric trucks, a market estimated at $23 billion annually.
• Combined, Workhorse and Motiv have delivered approximately 1,000 trucks and accumulated about 17 million miles traveled, serving 10 of the largest fleets in North America.
• The merger is expected to drive down manufacturing costs and enable direct competition with internal combustion engines on Total Cost of Ownership (TCO).
• The combined company plans to offer a complete range of Class 4-6 products with commonized hardware, software, batteries, and other key components.
• Shareholders are urged to vote FOR the merger at Workhorse's 2025 Annual Meeting of Stockholders to secure long-term success.

Sentiment

Score: 7

Explanation: The filing presents a highly optimistic view of the proposed merger, emphasizing significant market opportunity, combined strengths, and anticipated cost reductions. However, it also includes an extensive list of risks associated with the merger and general business operations, which tempers the overall sentiment, preventing a higher score. The tone is promotional for the merger.

Positives

• The merger creates a combined entity with extensive experience in the automotive and commercial truck industry, targeting a significant $23 billion annual medium-duty electric truck market opportunity.
• Combined companies have a proven track record, having delivered approximately 1,000 trucks and accumulated 17 million miles, serving 10 of the largest fleets in North America.
• The transaction is expected to drive down manufacturing costs, improving competitiveness on Total Cost of Ownership (TCO) against internal combustion engines.
• Integration will allow for a complete range of Class 4-6 products with commonized components, enhancing efficiency and product offering.
• The W56 is highlighted as the 'best class 5/6 step van in the marketplace'.

Risks

• Inability to successfully integrate businesses and technologies, potentially leading to less effective and efficient operations.
• Risk that expected benefits and synergies of the proposed transaction may not be fully achieved in a timely manner, or at all.
• Failure to obtain Workhorse shareholder approval or satisfy other conditions for the merger, or the transaction failing to close.
• Regulatory approvals, consents, or authorizations for the merger may not be obtained or may be subject to unanticipated conditions.
• Occurrence of any event, change, or circumstance that could lead to the termination of the proposed transaction.
• Unanticipated difficulties, liabilities, or expenditures related to the transaction.
• Potential negative effect of the announcement, pendency, or completion of the merger on business relationships and operations.
• Uncertainty regarding the long-term value of the combined company's common stock and potential impact on Workhorse's stock prices.
• Risks that the proposed transaction disrupts current plans and operations, and potential difficulties in hiring or retaining employees.
• Challenges in developing and manufacturing the product portfolio, including the W4 CC, W750, and W56.
• Difficulty in attracting and retaining customers for existing and new products.
• Impact of ongoing and anticipated changes in the U.S. political environment, including tariffs and regulatory agencies.
• Risks associated with obtaining and executing product orders.
• Unavailability, reduction, elimination, or adverse application of government subsidies and incentives, or challenges to regulations like California Air Resource Board's Advanced Clean Fleet.
• Changes in attitudes toward environmental, social, and governance (ESG) matters.
• Supply chain disruptions, including constraints on steel, semiconductors, and other material inputs, leading to cost increases.
• Limited operations and the need to expand and enhance production processes to fulfill orders.
• General inability to raise additional capital to fund operations and business plan.
• Inability to receive sufficient proceeds from financing arrangements to meet liquidity needs, and potential costs, dilution, and restrictions from such financing.
• Inability to maintain compliance with Nasdaq listing requirements, and the impact of actions like reverse stock splits.
• Inability to protect intellectual property.
• Lack of market acceptance of products.
• Inability to obtain sufficient liquidity from operations and financing to continue as a going concern, and inability to control expenses.
• Effectiveness of cost control measures, including employee furloughs.
• Potential competition and shifts in technology.
• Volatility and deterioration of national and international capital markets and economic conditions.
• Global and local business conditions, acts of war (e.g., Ukraine, Middle East) and/or terrorism.
• Pricing strategies of competitors.
• Inability to retain key members of the management team.
• Inability to satisfy customer warranty claims.
• Outcome of regulatory or legal proceedings, including with Coulomb Solutions Inc.
• Inability to realize the benefits of the sale and leaseback transaction of the Union City Facility.

Future Outlook

The combined Workhorse and Motiv are positioned to win the medium-duty EV market, deliver unmatched value to fleets, and create lasting growth for shareholders by fully integrating to offer a complete range of Class 4-6 products with commonized components and driving down manufacturing costs to compete on Total Cost of Ownership.

Management Comments

• "We spent the last four years building a rock-solid foundation for a successful commercial EV company here."
• "Medium-duty trucks are the lifeblood of the American commerce system."
• "On the investor call a few weeks ago, I described this transaction as a chocolate-meets-peanut-butter kind of moment."
• "The W56 is the best class 5/6 step van in the marketplace."
• "Together we'll be able to drive down the cost of manufacturing these trucks and we'll be able to compete very directly with internal combustion engines on Total Cost of Ownership."
• "We believe that by fully integrating these two companies to offer a complete range of class 4-6 products developed with commonized hardware, software, batteries, and other key components well put ourselves in a strong position to deliver great products and deliver great outcomes for our customers."
• "Together, Workhorse and Motive are positioned to win the medium-duty EV market, deliver unmatched value to fleets, and create lasting growth for our shareholders."
• "And the only way to secure the long-term success of the company is to vote FOR the Workhorse Motive merger."

Industry Context

The merger positions the combined entity to capitalize on the growing electrification trend in the commercial vehicle sector, specifically targeting the substantial medium-duty electric truck market. This move reflects a broader industry consolidation and strategic alignment to achieve economies of scale, reduce production costs, and enhance product offerings to meet increasing demand for sustainable fleet solutions.

Comparison to Industry Standards

• The combined entity's delivery of approximately 1,000 trucks and 17 million miles traveled positions them as a significant player in the nascent but rapidly growing medium-duty EV market, comparable to early leaders in specialized EV segments.
• The focus on driving down Total Cost of Ownership (TCO) to compete with internal combustion engines (ICE) aligns with a critical industry benchmark for EV adoption, as companies like Rivian and Ford Pro are also emphasizing TCO for their commercial EV offerings.
• Serving 10 of the largest fleets in North America indicates strong market penetration and customer trust, a key differentiator in a competitive landscape that includes established OEMs and emerging EV startups.
• The W56 being described as the 'best class 5/6 step van' suggests a competitive product offering against vehicles from companies like BrightDrop (GM) or electric versions of Ford E-Transit chassis.

Legal Proceedings

• Outcome of any regulatory or legal proceedings, including with Coulomb Solutions Inc., is listed as a risk.

Stakeholder Impact

• Shareholders: Expected lasting growth and value creation from the merger, but also risks related to stock price uncertainty and potential dilution from future financing. Urged to vote FOR the merger.
• Employees: Potential difficulties in hiring or retaining employees as a result of the proposed transaction is listed as a risk. Effectiveness of cost control measures, including employee furloughs, is also a risk.
• Customers: Expected unmatched value to fleets, quality trucks, and a complete range of Class 4-6 products.
• Partners: The merger involves combining Workhorse's network of truck dealers with Motiv's national account relationships.
• Creditors: Impact on liquidity and ability to continue as a going concern is a risk, which could affect creditors.

Next Steps

• Workhorse stockholders to read the Definitive Proxy Statement and other relevant documents filed with the SEC.
• Workhorse stockholders to vote FOR the Workhorse Motiv merger at the 2025 Annual Meeting of Stockholders.
• Completion of the proposed merger transaction, subject to shareholder and regulatory approvals and satisfaction of conditions.
• Integration of Workhorse and Motiv businesses and technologies.
• Development and manufacturing of the combined product portfolio (W4 CC, W750, W56).

Key Dates

Recommendation

The proposed merger with Motiv Power Systems presents a compelling strategic move for Workhorse, positioning the combined entity to become a leading player in the rapidly expanding $23 billion medium-duty electric truck market. The synergy of Workhorse's step van and dealer network with Motiv's national account relationships and electrification system is expected to drive significant cost reductions and enhance competitiveness on Total Cost of Ownership, a critical factor for fleet adoption. With a combined track record of 1,000 trucks delivered and 17 million miles, and serving 10 of North America's largest fleets, the company demonstrates a strong foundation and market acceptance. While the filing outlines numerous risks inherent in any merger and the EV industry, the strategic rationale and potential for market capture suggest a strong long-term growth trajectory, making it an attractive investment for those with a higher risk tolerance.

Keywords

Workhorse Group, Motiv Power Systems, Merger, Electric Vehicles, EV, Medium-Duty Trucks, Commercial EV, W56, Class 4-6 Trucks, Total Cost of Ownership, Shareholder Vote, SEC Filing, Proxy Statement, Automotive Industry, Fleet Electrification