8-K: Workhorse Q2 2025 Results & Motiv Merger Plan

Workhorse Group reported significantly improved second-quarter financial results and announced a definitive merger agreement with Motiv Electric Trucks to create a leading North American medium-duty electric truck OEM.

Summary

• Workhorse Group Inc. reported financial results for the second quarter ended June 30, 2025, showing a net loss of $14.8 million, a significant improvement from a $26.3 million net loss in the prior year period.
• Sales, net of returns and allowances, increased to $5.7 million in Q2 2025, up from $0.8 million in Q2 2024, driven by higher W56 shipments.
• The company shipped a record 32 W56 step vans and secured 36 purchase orders for these units during the quarter.
• Operating expenses decreased by $7.0 million year-over-year, with Selling, General, and Administrative (SG&A) expenses down $6.3 million to $5.8 million, and Research and Development (R&D) expenses down $0.7 million to $1.2 million.
• Workhorse entered into a definitive merger agreement with Motiv Electric Trucks, aiming to create a leading North American medium-duty electric truck OEM with increased scale, an expanded product portfolio, and enhanced operational efficiencies.
• In connection with the proposed merger, Workhorse secured interim funding totaling approximately $25 million from entities affiliated with Motiv's controlling investor, comprising a $20 million sale leaseback of its Union City, Indiana manufacturing facility and a $5 million secured convertible note financing.
• The company's W56 platform vehicles have accumulated over 212,000 miles in customer and partner fleets, demonstrating 97% uptime in daily last-mile operations.
• As of June 30, 2025, cash and cash equivalents were $2.2 million, with $22.5 million in restricted cash.

Sentiment

Score: 7

Explanation: The sentiment is positive due to significantly improved financial results (reduced net loss, increased sales, lower operating expenses) and a major strategic merger announcement with Motiv Electric Trucks, which is expected to enhance scale and operational efficiency. The interim funding also provides crucial liquidity. However, the company still operates at a gross loss, and there's a notable increase in convertible note liabilities and total liabilities, indicating ongoing financial challenges despite the improvements.

Positives

• Sales, net of returns and allowances, increased significantly to $5.7 million in Q2 2025 from $0.8 million in Q2 2024, a $4.8 million increase.
• Net loss for Q2 2025 was $14.8 million, a substantial improvement from a $26.3 million net loss in Q2 2024.
• Operating expenses decreased by $7.0 million year-over-year, reflecting successful cost conservation efforts.
• SG&A expenses decreased by $6.3 million, primarily due to lower employee compensation, legal, professional, and insurance expenses.
• R&D expenses decreased by $0.7 million, driven by lower headcount, prototype part expenses, and rent.
• Shipped a record 32 trucks in the second quarter, demonstrating increased production and delivery capabilities.
• Secured 36 purchase orders for W56 step vans, indicating strong customer demand.
• Entered into a definitive merger agreement with Motiv Electric Trucks, a strategic move expected to create a leading OEM with increased scale and operational efficiencies.
• Obtained $25 million in interim funding through a $20 million sale leaseback and a $5 million secured convertible note, providing near-term liquidity and simplifying the capital structure.
• The W56 platform demonstrated strong real-world performance with over 212,000 miles accumulated and 97% uptime in customer fleets.
• Advanced product roadmap by developing and integrating the Utilimaster Aeromaster walk-in van body on the W56 chassis, broadening application options.

Negatives

• Gross loss increased to $7.4 million in Q2 2025 from $6.5 million in Q2 2024, despite higher sales.
• Cost of sales increased by $5.8 million to $13.1 million, primarily driven by higher sales volume and a $1.8 million increase in inventory excess and obsolescence reserves.
• Convertible notes at fair value significantly increased to $39.5 million as of June 30, 2025, from $10.5 million as of December 31, 2024.
• Total current liabilities increased substantially to $73.5 million as of June 30, 2025, from $45.2 million as of December 31, 2024.
• Total stockholders' equity decreased to $22.3 million as of June 30, 2025, from $44.3 million as of December 31, 2024.

Risks

• Ability to successfully integrate businesses and technologies with 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 may not be fully achieved in a timely manner, or at all.
• Ability to obtain the approval of shareholders required to consummate the proposed transaction and the timing of its closing.
• Risk that conditions to the transaction are not satisfied on a timely basis or at all, or failure of the transaction to close for any other reason.
• Risk that any required regulatory approval, consent, or authorization for the proposed transaction is not obtained or is obtained subject to unanticipated conditions.
• 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.
• 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 as to 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 the W4 CC, W750, and W56.
• 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.
• Implementation of changes to the existing tariff regime by the new Presidential Administration and measures taken in response 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 any challenge to or failure by governmental entities to adopt or enforce regulations.
• 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.
• Ability to capitalize on opportunities to deliver products to meet customer requirements.
• 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 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 reverse stock splits 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.
• Ability to control expenses and the effectiveness of cost control measures, including effects of furloughing employees.
• 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 being 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 company anticipates continued demand for its high-quality trucks, particularly the W56 step vans, and believes the proposed merger with Motiv Electric Trucks will deliver significant and meaningful value to customers and shareholders by creating a leading North American medium-duty electric truck OEM. This combination is expected to benefit from increased scale, an expanded product portfolio, enhanced operational efficiencies, lower unit costs, and optimized total cost of ownership for customers. Management also expects to continue optimizing the business and benefiting from a stronger financial foundation following the interim funding and capital structure simplification.

Management Comments

• "Our second quarter results reflect Workhorse's continued efforts to advance our product roadmap, secure purchase orders and deliver exceptional vehicles for our customers." Workhorse CEO Rick Dauch
• "We shipped a record 32 trucks in the second quarter, driven by the proven performance of our W56 step vans and positive customer feedback."
• "We believe the continued demand we are seeing for our high-quality trucks further demonstrates the critical role Workhorse plays in the last mile delivery market."
• "We are confident in the long-term industry trend towards electrification and believe that by combining with Motiv, we will deliver significant and meaningful value to our customers and shareholders." Workhorse CEO Rick Dauch
• "During the second quarter, we maintained our focus on operating efficiently, conserving cash, and extending our runway, enabling us to reach our milestone agreement with Motiv." Workhorse CFO Bob Ginnan
• "The recently completed $20 million sale leaseback and $5 million secured convertible note transactions will simplify Workhorse's capital structure and provide us with the near-term liquidity to support our operations through the close of the transaction." Workhorse CFO Bob Ginnan
• "We are encouraged by the opportunities we see to continue optimizing our business and look forward to benefiting from a stronger financial foundation." Workhorse CFO Bob Ginnan

Industry Context

This announcement underscores the ongoing consolidation and strategic positioning within the rapidly evolving zero-emission commercial vehicle market, particularly in the medium-duty and last-mile delivery segments. The proposed merger with Motiv Electric Trucks reflects a broader industry trend towards achieving greater scale, expanding product portfolios, and enhancing operational efficiencies to reduce unit costs and total cost of ownership for customers, which is crucial for widespread adoption of electric commercial vehicles. The focus on the W56 step vans and their proven performance highlights the increasing demand for reliable EV solutions in the last-mile delivery sector, a key growth area driven by e-commerce and environmental regulations.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to benchmark against industry standards. It highlights the W56's 97% uptime in daily last-mile operations across diverse real-world routes, from Minnesota to Arizona, which suggests strong reliability for its class, but lacks direct comparative data to other OEMs' vehicle performance metrics.

Legal Proceedings

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

Related Party Transactions

• Workhorse completed two transactions with entities affiliated with Motiv's controlling investor: a $20 million sale leaseback for its Union City, Indiana manufacturing facility and a $5 million secured convertible note financing.

Stakeholder Impact

• Shareholders: Potential for long-term value creation through increased scale and efficiency from the Motiv merger, but also potential dilution from convertible notes and past reverse stock splits. The interim funding provides near-term liquidity.
• Customers: Expected benefits include an expanded product portfolio, enhanced operational efficiencies, lower unit costs, and optimized total cost of ownership for electric vehicles, particularly for last-mile delivery.
• Employees: Cost reduction efforts included lower headcount, which may impact current employees. The merger could lead to integration challenges or new opportunities within the combined entity.
• Suppliers: Increased sales volume and production could lead to higher demand for components, but supply chain disruptions remain a risk.
• Creditors: Existing senior secured lender will see debt repaid and warrants cancelled upon merger closing, while Motiv's controlling investor becomes a new secured creditor with a $5 million convertible note.

Next Steps

• Workhorse and Motiv management will hold a joint conference call on August 19, 2025, to discuss these financial results and the merger agreement.
• Closing of the definitive merger agreement with Motiv Electric Trucks, subject to shareholder and regulatory approvals.
• Continued efforts to build additional order interest through the company's expansive dealer network.
• Further benefit from joint engineering experience, increased manufacturing scale, and common platform development following the proposed transaction with Motiv.
• Continued optimization of the business to benefit from a stronger financial foundation.

Key Dates

Recommendation

The filing presents a compelling case for a 'buy' recommendation, particularly for investors with a long-term view on the electrification of commercial vehicles. The significant reduction in net loss, coupled with a substantial increase in sales and effective cost control, indicates improving operational efficiency. The strategic merger with Motiv Electric Trucks is a transformative move, poised to create a leading North American OEM with increased scale, a broader product portfolio, and enhanced operational synergies, which are critical for success in this capital-intensive industry. While the company still faces a gross loss and increased liabilities from the new financing, the interim funding provides crucial liquidity and simplifies the capital structure, positioning the combined entity for future growth. The proven performance and increasing demand for the W56 platform further validate the company's product strategy. The risks associated with integration and market acceptance are present, but the strategic benefits and improving financial trajectory suggest strong upside potential.

Keywords

Electric vehicles, Commercial vehicles, Last-mile delivery, EV trucks, Workhorse, Motiv Electric Trucks, Merger, Q2 earnings, Financial results, W56 step vans, Zero-emission vehicles, OEM