Workhorse Group Q1 2026 Earnings Call - EV TCO Wins on Fuel, But Gross Losses Widen as Integration Costs Bite

Operator: Ladies and gentlemen, greetings and welcome to the Workhorse Group Q1 2026 earnings call. At this time, all participants are in the listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone requires operator assistance during the conference call, please signal an operator by pressing star and 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host for today, John Williams, Chief Communications Officer. Please go ahead.

John Williams, Chief Communications Officer, Workhorse Group: Thank you, operator, and good afternoon, everyone. I would like to welcome all of you to our 1st quarter 2026 earnings call. Before we begin, I’d like to note that we have posted our results for the 1st quarter ended March 31, 2026 via press release in Form 8-K. We filed our associated quarterly report on Form 10-Q with the SEC. You can find the release and an accompanying presentation in the investor relations section of our website. We will be tracking along with the presentation during this call. Joining me on today’s call are Scott Griffith, our Chief Executive Officer, and Bob Ginnan, our Chief Financial Officer. For today’s agenda, please turn to slide 3. Following my opening remarks, I will hand it over to Scott, who will provide an update on our operational and commercial progress and the strategic priorities we are focused on.

Bob will then walk us through our financial results for the quarter and our capital position. Scott will then make closing remarks before we open the call for questions. Our cautionary statements can be found on slide 4. Some of the comments that will be made today are forward-looking statements, which are based on current expectations, projections, or opinions about future periods. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties are discussed in today’s press release and in our filings with the SEC, including our Form 10-K. Now, I will turn it over to Scott.

Scott Griffith, Chief Executive Officer, Workhorse Group: Thanks, John. Good afternoon, everyone. Thank you for joining us. On our last call, I outlined 3 commitments we made at the close of the merger. Complete the integration, expand our product portfolio. Strengthen our financial position. The first quarter was about translating those commitments into measurable progress. The early read on what we’ve accomplished confirms our approach and execution are on target. Let’s dig into those. Starting with integration, the combination of Workhorse and Motiv is on track. Our facility aggregation is complete. The relocation of the Motiv production line into our Union City, Indiana plant is progressing as expected. We now have 3 production lines operating in Union City. In addition to the W56 step van line, we’ve begun builds on the new F59 chassis line. Our EPIC4 production line has also been successfully integrated into Union City.

Hardware and software platform commonization continues across the engineering organization. Supply chain optimization is underway, and we are systematically winding down our external integration support and the interim transition team that supported our early integration efforts. We’re also making exciting progress on our product development plans and activities. During the quarter, we made strong progress on further detailing and executing our product vision. In a few minutes, I’ll come back to this topic to talk more about two new product initiatives which are focused on the development of a next generation chassis and powertrain, as well as the coming launch of our first Class 5/6 cab chassis. We’ve also continued the simplification of our capital structure that began at close, and as Bob Ginnan will also describe, we strengthened our liquidity position with incremental borrowing to support production for the orders we have in hand.

We resolved 2 previously disclosed legal matters that had created overhang and distraction for the company, including the Coulomb Solutions matter that we resolved through a settlement agreement in April. Again, Bob will walk you through the financial details. The cost discipline that the team is applying across the combined organization is evident in the early read on synergy capture, which Bob will also detail. We continue to expect to exit 2026 at our previously communicated $20 million in annualized cost synergy run rate. In short, I’m pleased to report we are continuing to deliver on our commitments, controlling what is controllable and positioning Workhorse for sustained growth. As we are now almost midway through the second quarter, I’d like to reflect on the many recent conversations I’ve had with current and potential customers, industry and financial analysts, and partners about the overall state of the market.

I’ve been struck by the consistency of their feedback, in particular, when I compare it to the ongoing questions about whether or not we’ve proven product market fit for EVs in our category. Frankly, to those who keep lingering on the question of product market fit, I believe you’re focused on the wrong question. Let me explain. For the most part, in the medium duty sector, we believe it’s clear that today’s electric trucks, shuttles, and buses are meeting the moment. The strongest use cases, including mid-mile logistics, last mile delivery, municipal fleets, school buses and shuttles, and yard operations are now moving from questions around proof of concept and product market fit to scale deployment.

This is due primarily to the duty cycle of these early adoption applications and use cases which have short and predictable routes that return to a depot for lower cost overnight charging. Have lots of low speed start-stop driving that maximizes regenerative braking, further extending range and lowering total cost of electricity. Publicly reported data also emphasizes how far we are moving beyond questions of product market fit. For example, battery electric vehicle registrations in the medium and heavy-duty commercial truck segments grew 21% in 2025, with medium-duty delivery vans setting a new sales record. Fleets running those vehicles are already reporting total cost of ownership advantages versus the trucks they replaced, according to the State of Sustainable Fleets 2026 market brief.

The largest logistics operator in the world, Amazon, has deployed more than 30,000 all-electric Rivian vans, with announced plans to more than triple that amount in the near future. In a plenary session at ACT Expo last week, Amazon’s head of fleet business development stated plainly that the business case for electrification is solid and that Amazon intends to continue. Other major logistics operators including Purolator, Cintas, UPS, and the FedEx delivery network are committing at scale. These trends are borne out in our own sales success so far in 2026. In the first quarter, Workhorse announced two major purchase orders. Purolator, a long-standing customer, completed their fourth order from us. The PO is for 100 new step vans and will more than double the existing number of Workhorse vehicles already in their fleet.

Their continued orders from us reflects the quality of our vehicles, TCO success, and the service levels we’re providing. We also announced a 100-unit purchase order from Gateway Fleets through our long-standing dealer, Kingsburg Truck Center. Gateway is a California-based provider of bundled electric vehicle and charging solutions for commercial delivery operators. Their lease-based model, which packages the truck, the charging infrastructure, fleet support, and depot access in a single offering, is a great example of how the EV ecosystem is maturing to accelerate adoption of electric trucks. Importantly, this model eliminates the upfront costs of vehicles and charging infrastructure, a barrier to adoption for some. We continue to have success selling our W56 step vans to small businesses who are independent service providers contracted with FedEx for last-mile package delivery.

In fact, we now have 75 vehicles either deployed or on order for near-term delivery to ISPs operating in several states. In summary, the data is telling us it’s no longer a question of if EV trucks work in large segments of the medium-duty commercial truck market. Rather, it’s now a question of when do we move past the tipping point to a time when software-defined all-electric medium-duty trucks are the norm, not the exception. The question everyone should be asking is, what is it gonna take to get the industry to that tipping point? Well, the data suggests we’ve already proven the case for EVs on a total cost of ownership basis. In fact, the data from Stables by Workhorse, an independent service provider contracted with FedEx that we own and operate, tells a powerful story.

In 2025, our Stables operation delivered nearly 560,000 packages over nearly a quarter million miles. It’s a real-world test bed, not only of our technology, but of the comparative cost of operations. Last year, in that fleet, we spent more than $76,000 on gas for our ICE trucks. We spent a little more than $10,800 to power our electric trucks. On a per mile basis, that translated to about $0.53 per mile for ICE trucks and a little more than $0.10 per mile for EVs. That was before the conflict in Iran and a refinery accident in Ohio, which both happened earlier this year. Using today’s gas prices and electricity prices in Ohio, the cost gap widens to $0.73 per mile.

Apply that math to a fleet of 20 vehicles, that fleet would save $220,000 alone on fuel over the course of a year. That’s a significant savings in a business with extremely tight margins. This analysis does not include additional savings from maintenance like oil changes or increased uptime because EVs need less service than ICE vehicles. With demonstrated TCO savings continuing to make the case for electric trucks on an operating basis, what remains is to get the entry price more competitive with ICE. We believe that’s what we will drive the tipping point. I’ll spend a few minutes discussing what we’ve already done to accomplish exactly that, as well as where we’re headed. During Q1, we announced a new version of our popular W56 step van.

This new version offers a 140 kilowatt battery that provides a sufficient range for many of our last mile delivery customers, but at a lower sticker price. Response to this new offer has been strong and will be reflected in future financial disclosures. We also announced significantly reduced promotional pricing on our 210 kilowatt step van, a key factor in Gateway Fleets’ decision to purchase 100 W56s. These data points have convinced me that focusing on closing the price gap with ICE as quickly as possible will increase the adoption of our vehicles in many of the largest and most important commercial fleets in North America. How do we continue to narrow the gap between ICE and EV price points?

While I’m pleased to progress on cost reduction through synergies resulting from the merger, the reality is that such savings only go so far. To achieve the kind of breakthrough cost reduction needed to compete with ICE requires fundamental structural changes in hardware and software, as well as strategic use of global supply chain. Toward that end, today I’m announcing we’re developing a plan for a new proprietary modular chassis design that will be produced exclusively at our Union City manufacturing plant. The new chassis design will be based on the foundational learnings gathered from proven W56 components, but with a scalable architecture that supports flexible wheelbase configurations, advanced battery and axle technologies, and next-generation software and power electronics. This approach includes the standardization of both hardware and software systems, enabling us to build a broad portfolio of vehicles in an extremely cost-efficient manner at a low volume.

While we’re moving forward very aggressively to begin tests and validation of this groundbreaking design later in 2026, with initial production expected in early 2027. I’m also pleased to announce we’ve developed a plan for our first Class 5/6 cab chassis, which will pair with our innovative new modular chassis with a lightweight, low-cost cab design for efficient upfitting. The result will be a greater payload capacity, faster time to market, and a price point and total cost of ownership that compares very well with ICE alternatives. As with the new modular chassis, our engineering team is planning to begin tests and validation of this revolutionary platform that spans application across all classes of medium-duty trucks in 2026, supporting a planned start of production for the cab chassis platform in early 2027.

The combination of a combined modular chassis and the Class 5/6 cab chassis will enable us to not only offer fully electric software-defined trucks that should compare well with ICE economics, but also appeal to a wider segment of the total addressable market through a broader product portfolio. We believe these actions will bring us to the tipping point I referred to earlier, and I’m looking forward to reporting our progress each quarter and in between as we bring this exciting vision and product strategy to life. In the meantime, we continue to take steps to not only take care of our current customers, but plan for future expected growth. Last week, we announced our plans for scalable customer support across our North American network of trucks through a combination of national dealer relationships, internal capabilities, and a partnership we announced with InCharge Energy.

When the program launches later this year, Workhorse fleet customers will have access to live specialists to simplify support by giving fleets one accountable entity to navigate matters that span Workhorse vehicles, charging infrastructure, electrical systems, and third-party hardware and software. Fleet electrification is still relatively early in the adoption cycle, so when technical issues arise, it isn’t always obvious where the culprit lies. Sorting that out quickly requires genuine expertise in both vehicle and charging ecosystem around it. InCharge’s deep knowledge of EV charging hardware and software is a real asset in helping Workhorse customers find and resolve the root cause faster. This industry-first partnership is a key aspect of our plan to deliver scalable, first-call service operations and provide large fleets with what they value most, high uptime. Major fleet operators expect not only a great truck at a competitive cost, but also OEM-grade customer service.

We believe our ability to offer such a combination will be an important part of how we win and retain the largest fleet operators in North America. In summary, we’re executing against the commitments we made at close, integration is on track, pricing actions are converting into orders, and we have a cleaner operational foundation than we had 90 days ago. We have developed what we believe is a clear and achievable plan to deliver purchase price and TCO metrics that favor EVs over ICE trucks. I look forward to reporting on our progress in the coming months. With that, let me hand it over to Bob to walk you through the financial details. Thanks, Scott, good afternoon, everyone. Before walking through the numbers, I want to set context.

Bob Ginnan, Chief Financial Officer, Workhorse Group: Our consolidated results for the first quarter of 2026 reflect 3 full months of the combined Workhorse and Motiv operation. Comparative information for the first quarter of 2025 reflects only Motiv, the accounting acquirer in the reverse merger. As a result, certain year-over-year comparisons are not on a like-for-like basis, and where helpful, I will reference combined comparisons consistent with the disclosures in our 10-Q so that you have the right reference point. Revenue for the first quarter of 2026 was $4.3 million compared to $1.1 million in the first quarter of 2025. We delivered 21 vehicles in the quarter compared to 5 vehicles in the prior year period. As Scott noted, the majority of our Q1 deliveries were W56 step vans, consistent with the demand patterns and the customer base we serve.

Scott Griffith, Chief Executive Officer, Workhorse Group: Cost of sales for the first quarter was $11.8 million compared to $2.2 million in the prior year, resulting in a gross loss of $7.5 million for the quarter.

Bob Ginnan, Chief Financial Officer, Workhorse Group: Costs in the first quarter were higher, driven primarily by higher sales volume and the change in cost structure, where we now operate our own manufacturing facility versus last year when Motiv operated with contract manufacturers. In addition, we recorded a $1.5 million warranty charge, which was primarily attributable to costs related to a retrofit campaign that is underway for certain Motiv trucks previously sold in Canada. Costs incurred during the quarter for the retrofit campaign were higher than our original estimates, and we increased our reserves required for its completion.

On a structural basis, cost of sales reflects the higher fixed cost base of the combined manufacturing footprint relative to the Motiv-only prior year period, as well as the temporary cost of winding down the contract manufacturing run under the legacy Motiv operating structure in Q1, which exits in the second quarter as we complete the consolidation of production at Union City. We continue to expect gross margin to improve as we scale production volumes in our Union City facility and realize the cost benefits of the combined platform. Selling, general, and administrative expenses were $9.5 million in the first quarter of 2026 compared to $4.3 million in the first quarter of 2025.

The year-over-year increase was driven primarily by the inclusion of the full combined company cost base in 2026 compared to only Motiv in the prior year period. We also spent $900,000 in merger integration projects in the quarter. Research and development expenses were $4.1 million in the first quarter of 2026 compared to $3.7 million in the first quarter of 2025. The increase was due to higher employee costs as we make strategic R&D investments, primarily our initiative to lower the total bill of material costs of our vehicles to be in line with ICE. With these results, we believe that we are on track to achieve the synergy targets that we have previously outlined.

Loss from operations was $21.1 million in the first quarter of 2026 compared to $9.9 or $9.1 million in the first quarter of 2025. Net loss for the quarter was $19.9 million or $0.99 per basic and diluted share, compared to a net loss of $12.7 million or $1.36 per share in the prior year. The net loss for the quarter includes a $1.7 million gain on the change in fair value of stock rights, which is non-cash and non-operating in nature. Turning to the balance sheet, subsequent to quarter end, we have meaningfully strengthened our liquidity position to support production for the order pipeline Scott described.

On April first, we drew $7.3 million under the customer order credit agreement, bringing the total outstanding to $12.3 million. In April, we also amended our credit agreement with our lender, increasing the borrowing capacity under our cash flow agreement to $20 million and decreasing the borrow capacity under our customer order credit agreement to $30 million to adjust to the maximum level we expect to need at any point in time for the foreseeable future. Following the amendment, we drew an additional $10 million under the cash flow credit agreement. As of the filing date of our 10-Q, we had $17.7 million available to borrow under the customer order credit agreement.

In addition to the credit agreement activity, in April, we entered into a settlement agreement to resolve the previously disclosed Coulomb Solutions, Inc. litigation, which provides for the dismissal of the matter in exchange for a payment of $4.3 million. We expect to fund the settlement payment through borrowings under our customer order credit agreement. With this settlement of this matter, together with the resolution of one other previously disclosed legal item, we have removed two long-standing legacy overhangs in the period. We are continuing to actively evaluate financing alternatives to support our growth plan. Consistent with the framing we provided last quarter, we will share additional details as they become available.

While we are not providing specific financial guidance at this time, we expect deliveries to increase over the course of 2026 as we ramp production at the Union City facility and convert our growing pipeline of orders into revenue. With that, let me turn it back over to Scott for closing remarks. Thanks, Bob. I’d like to end where I began. The opportunity in front of us hasn’t changed. We believe a large underserved commercial vehicle market is nearing the tipping point of an electric transition. We have the facilities and production capacity to scale to profitable volumes. We have a sales strategy focused on the customers and geographies most likely to adopt at scale. We’re continuing to strengthen our team, our balance sheet, and our operational platform to fund the journey.

Scott Griffith, Chief Executive Officer, Workhorse Group: Ultimately, we believe we’re well-positioned in the category to deliver on both of the key drivers of the tipping point to electrification of medium-duty segment, ICE comparable economics and professional, scalable post-sale support. We believe the revised product priorities and product development roadmap I walked through today will address the need to deliver comparable economics and our new partnership with InCharge Energy, combined with the ongoing learnings from our existing customers and our data from our own operations, our FedEx Ground ISP, put us in a great position to solve the second. We appreciate your continued support, and we look forward to updating you on our progress in the months ahead. Operator, you may now open the lines to questions.

Operator: Ladies and gentlemen, we will now begin the question and answer session. To ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while we poll for questions. Our first question comes from Benjamin Sommers with BTIG. Please state your question.

Benjamin Sommers, Analyst, BTIG: Good afternoon, guys, and thanks for taking my question. First, I wanted to ask on the promotional pricing. You know, I guess I’m just curious what has been the preliminary demand response here, and how do you plan to incorporate or initiatives like this into the longer term business strategy?

Scott Griffith, Chief Executive Officer, Workhorse Group: Hey, Ben. Great question. This is something that I really think a lot about. First, I wouldn’t say it was a test. I think we’re ready to start running these types of promotional pricing. While it’s set up as a temporary price change, I think it’s indicative of the direction we have been talking about, and we spend a lot of time on this call talking about these prices have to decline as our BOM structure and our cost structure declines. We’ll continue to do that. I think of what we just did as sort of step 1 of N steps. I don’t know how many steps there’ll be, but as we make more progress on cost reduction, we continue to ladder that price down as the plan.

You know, think of annual changes, not probably much more frequently than that, but we have a plan going forward. The new things like that new modular chassis I talked about, that really is a game-changing cost improvement for us. As we launch those kinds of initiatives, new batteries along with those, you’ll see us take pricing actions along the way. What the response was your real question. Candidly, I don’t think the Gateway order would have happened without that promotional pricing. That was in part why they decided to go ahead and make a move. It’s not just Gateway, it’s the customer they serve. They’re really serving small businesses that are almost exactly what we’re doing near Cincinnati in our own FedEx ISP.

We’re very familiar with the price sensitivity of those operations. These are very thin margin small business operators, who are paying drivers that own one truck, and they own the trucks, and they’re very price sensitive. And by the way, that’s a big chunk of the FedEx Ground business. There’s about, I don’t remember exactly off the top of my head, but I think there’s, Bob, help me out. There’s, you know, tens of thousands of FedEx trucks that fit into that ISP. You know, it’s probably close to 60,000, I think.

Bob Ginnan, Chief Financial Officer, Workhorse Group: Probably close to 90,000.

Scott Griffith, Chief Executive Officer, Workhorse Group: 90,000. Sorry. That includes the both sides of it. There’s 90,000 trucks out there in the hands of ISPs, these independent operators that in a very price sensitive setting like this. That’s why we’re taking these actions, and that’s how something like Gateway really makes a difference ’cause they bring in a bundled offering that is a truck, you know, the energy, the charging system, and the financing around that without all the upfront costs that small businesses often can’t pony up. It’s a real game changer for us to have both, you know, a Gateway type partner and the right price in the market.

Benjamin Sommers, Analyst, BTIG: Super helpful. My second question, you know, you guys did a great job laying out the data points for, you know, the rising fuel costs and the impact that has on the affordability of, you know, electric fleets. I’m just kinda curious, you know, if this has come up at all in conversations with customers yet and just kind of, you know, potentially how quick that impact of the rising fuel costs has maybe, you know, trickled into the demand for Workhorse’s products. Thank you.

Scott Griffith, Chief Executive Officer, Workhorse Group: Another great question. I think, you know, we wanna be good, and sometimes we get lucky. Honestly, while no one wants to see high gas prices, it is helping the business. I wouldn’t say we’ve received any hard orders because of the price change yet. I’d say the inbound queries and the number of people really kind of penciling and doing the math now around this high gas price has gone way up in the last 30 to 60 days. I expect that’s gonna start to translate into orders. Can’t make any promises, but, you know, the phone’s certainly ringing with a lot of questions around this right now.

Benjamin Sommers, Analyst, BTIG: Super helpful. Thank you guys for the update, and thanks for taking my questions.

John Williams, Chief Communications Officer, Workhorse Group: Thanks, Benjamin. With that, I’ll turn it back to Scott Griffith for the closing comments.

Scott Griffith, Chief Executive Officer, Workhorse Group: Once again, thanks everyone for joining us today. On behalf of Bob and the rest of the executive team, we appreciate the questions, and your continued interest in Workhorse. It’s obviously a really dynamic, exciting time for us, and we’ll look forward to seeing you on the next earnings call and talking about our continued progress.

Operator: Ladies and gentlemen, the conference call of Workhorse Group has now concluded. Thank you for your participation. You may now disconnect your lines.