DEFA14A: Workhorse to Merge with Motiv Power Systems

Workhorse Group Inc. announced an agreement to merge with Motiv Power Systems, Inc. to create a leading North American medium-duty electric truck OEM.

Summary

• Workhorse Group Inc. has entered into an Agreement and Plan of Merger with Motiv Power Systems, Inc., dated August 15, 2025.
• The merger aims to create a leading North American medium-duty electric truck OEM.
• The combination is expected to broaden Workhorse's product offering and strengthen its nearand long-term financial position.
• Motiv, founded in 2009, is a leading manufacturer of medium-duty, zero-emission electric trucks and buses.
• The merger is positioned as a strategic move in light of challenging market conditions to best position Workhorse for the future.
• The combined company's headquarters location will be decided during the integration process.
• Customers are expected to benefit from increased scale, an expanded product portfolio, and enhanced operational efficiencies post-merger.

Sentiment

Score: 7

Explanation: The announcement of the merger with Motiv Power Systems is a proactive strategic move by Workhorse to address challenging market conditions and strengthen its position in the medium-duty EV segment. While it presents clear opportunities for expanded product offerings, increased scale, and improved financial stability, the filing also explicitly details numerous risks inherent in such a transaction and the broader market, including integration challenges, financing difficulties, and market acceptance. The overall sentiment is cautiously optimistic, recognizing the strategic necessity and potential upside while acknowledging significant hurdles.

Positives

• Creation of a leading North American medium-duty electric truck OEM.
• Expected to broaden product offering and strengthen Workhorse's nearand long-term financial position.
• Provides Workhorse shareholders the opportunity to participate in the upside of a leader in the medium-duty EV commercial vehicle market.
• Motiv's diverse product portfolio and top fleet relationships complement Workhorse's proven vehicles, manufacturing capabilities, and national dealer network.
• Anticipated benefits for customers include increased scale, expanded product portfolio, enhanced operational efficiencies, lower unit costs, and optimized total cost of ownership.

Negatives

• The merger is being pursued in light of "challenging market conditions."
• The company faces a "general inability to raise additional capital to fund operations and business plan" as a risk factor.
• There is a risk of "inability to retain key members of our management team."
• There is a risk of "inability to satisfy our customer warranty claims."
• There is a risk of "furloughing employees" due to cost control measures.

Risks

• Inability to successfully integrate businesses and technologies, potentially leading to less effective and efficient operations.
• Expected benefits and synergies of the proposed transaction may not be fully achieved in a timely manner, or at all.
• Risk associated with obtaining shareholder approval and the timing of closing, including conditions not being satisfied or failure to close.
• Regulatory approvals, consents, or authorizations 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.
• 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 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 affecting regulatory agencies and tariff regimes.
• Risks associated with obtaining and executing orders.
• Unavailability, reduction, elimination, or adverse application of government subsidies and incentives, or challenges to regulations like CARB's Advanced Clean Fleet.
• Changes in attitude toward environmental, social, and governance matters.
• Supply chain disruptions, including constraints on steel, semiconductors, and other material inputs, leading to cost increases.
• Ability to capitalize on opportunities to deliver products to meet customer requirements.
• Limited operations and the need to expand and enhance production processes.
• General inability to raise additional capital to fund operations and business plan.
• Ability to receive sufficient proceeds from financing arrangements and the potential costs, dilution, and restrictions.
• Ability to maintain compliance with Nasdaq listing requirements and the impact of actions like reverse stock splits.
• Ability to protect intellectual property.
• Market acceptance of products.
• Ability to obtain sufficient liquidity to continue as a going concern and control expenses.
• Effectiveness of cost control measures and their impact, including employee furloughs.
• Potential competition, including shifts in technology.
• Volatility and deterioration of national and international capital markets and economic conditions.
• Global and local business conditions, acts of war 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 proposed merger with Motiv Power Systems is expected to create a leading North American medium-duty electric truck OEM, broaden Workhorse's product offering, and strengthen its financial position. The combined entity aims to build and deliver the next generation of electric trucks, better serve customers, and create long-term shareholder value through increased scale and operational efficiencies.

Management Comments

• Workhorse has 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.
• By combining with Motiv, we will create a broader product offering, strengthen Workhorse's nearand long-term financial position and provide Workhorse shareholders 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 for Workhorse.
• We believe we are a compelling and complementary fit, with Motiv's diverse product portfolio and top fleet relationships joining Workhorse's proven vehicles, manufacturing capabilities and national dealer network.
• Together, we are confident we will be able to build and deliver the next generation of electric trucks, better serve our customers and create long-term shareholder value.
• In light of challenging market conditions and with the support of our financial stakeholders, the Workhorse Board of Directors and management team evaluated numerous opportunities to best position Workhorse for the future.
• That process resulted in the actions Workhorse is now taking, which we believe represent the best path forward for Workhorse and its shareholders.
• Until the transaction is completed, it is business as usual. We are counting on you to stay focused on your day-to-day responsibilities.
• It is important to emphasize that it remains business as usual at Workhorse. Once the deal closes, we expect that customers will benefit from increased scale, an expanded product portfolio and enhanced operational efficiencies to support lower unit costs while optimizing total cost of ownership for customers.

Industry Context

This merger reflects a strategic consolidation within the rapidly evolving electric vehicle (EV) commercial truck market, particularly in the medium-duty segment. Facing challenging market conditions, Workhorse is seeking to gain scale, diversify its product portfolio, and enhance its financial stability by combining with an established player like Motiv. This move aligns with broader industry trends towards electrification of commercial fleets and the need for robust manufacturing and distribution networks to compete effectively against both traditional automotive giants and emerging EV startups.

Legal Proceedings

• Outcome of regulatory or legal proceedings, specifically mentioning Coulomb Solutions Inc., is a risk factor.

Stakeholder Impact

• Shareholders: Opportunity to participate in the upside of a leader in the medium-duty EV commercial vehicle market; urged to read the Proxy Statement; uncertainty as to the long-term value of the combined company's common stock is a risk.
• Employees: Business as usual until transaction completion; headquarters location to be decided during integration; potential difficulties in hiring or retaining employees as a result of the proposed transaction is a risk; impact of furloughing employees due to cost control measures is a risk.
• Customers: Expected to benefit from increased scale, expanded product portfolio, enhanced operational efficiencies, lower unit costs, and optimized total cost of ownership; risk of inability to satisfy customer warranty claims.
• Suppliers: Supply chain disruptions and cost increases impacting suppliers are risks.

Next Steps

• Completion of the merger transaction.
• Integration process to decide the combined company headquarters location.
• Workhorse intends to file a Proxy Statement on Schedule 14A with the SEC.
• Shareholders are urged to read the Proxy Statement and other relevant documents when they become available.

Key Dates

Recommendation

The proposed merger with Motiv Power Systems is a critical strategic pivot for Workhorse, aiming to address challenging market conditions and strengthen its competitive position in the medium-duty EV sector. While the combination offers potential for expanded product offerings, increased scale, and improved financial stability, the filing highlights numerous execution risks, including integration challenges, the ability to secure future capital, and market acceptance of new products. Given the significant uncertainties inherent in a merger of this scale and the explicit acknowledgment of ongoing market and operational risks, a 'hold' recommendation is prudent. Investors should monitor the progress of the integration, the realization of anticipated synergies, and the company's ability to navigate the competitive EV landscape before making further investment decisions.

Keywords

Workhorse Group, Motiv Power Systems, Merger Agreement, Electric Trucks, Medium-Duty EV, Commercial Vehicles, OEM, EV Market, Corporate Strategy, SEC Filing