workhorse investor presentation...

© 2017 Workhorse Group Inc. All Rights Reserved.

WORKHORSE GROUP INC.JANUARY 2017


INDUSTRY DATA AND FORWARD LOOKING STATEMENTS

1

Statements made in this presentation regarding matters that are not historical facts are “forward-looking statements” within the meaning of

the Private Securities Litigation Reform Act of 1995. Because such statements are subject to risks and uncertainties, actual results may differ

materially from those expressed or implied by such forward-looking statements. In some cases, you can identify these forward-looking

statements by terms such as “anticipate,” “believe,” “continue,” “could,” “depends,” “estimate,” “expects,” “intend,” “may,” “ongoing,” “plan,”

“potential,” “predict,” “project,” “should,” “will,” “would” or the negative of those terms or other similar expressions, although not all forward-

looking statements contain those words. We have based these forward looking statements largely on our current expectations and projections

about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and

financial needs. These forward looking statements are subject to a number of known and unknown risks, which include management and

employee operations and execution risks; a failure to develop sales and the loss of any key customer that we may develop; loss of key

personnel; competition in the markets we serve; intellectual property risks; our ability to fund our working capital requirements; risks

associated with the uncertainty of future financial results; risks associated with this offering; risks associated with raising additional capital

when needed and at reasonable terms; and risks associated with our reliance on third party suppliers of raw materials and other

organizations that provide goods and services to us. For more information on the risk factors related to these forward-looking statements,

please refer to Workhorse's Annual Report, Quarterly Report, and other periodic regulatory filings as filed with the SEC. New risk factors

emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on

our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in,

or implied by, any forward looking statements.

Workhorse obtained the industry and market data used throughout this presentation from our own research, internal surveys and studies

conducted by third parties, independent industry associations or general publications and other publicly available information. Independent

industry publications and surveys generally state that they have obtained information from sources believed to be reliable, but do not

guarantee the accuracy and completeness of such information. Forecasts are particularly likely to be inaccurate, especially over long periods

of time. We are not aware of any misstatements in the industry and market data we have presented herein, but estimates involve risks and

uncertainties and are subject to change based on various factors beyond our control.


INVESTMENT HIGHLIGHTS

• Proprietary technology enabled by Tier-1 suppliers, including

BMW and Panasonic

• Experienced and seasoned management team with decades

of experience in technology and engineering

2

• Leading manufacturer of medium-duty electric step vans in the U.S. targeting commercial fleets

Only OEM building electrified medium-duty vehicles in the U.S.

• Billion dollar annual market opportunity as fleets turn over 20,000 step vans per year

• Blue-chip customer base at a critical inflection point of adoption

UPS, FedEx, Cintas and Alpha Baking Company, among others

• Strong economic value proposition versus conventional step-vans

400%+ fuel efficiency improvement – 6 MPG to 30+ MPGe

$165,000+ cost savings over the life of each vehicle


• Automotive electrification company with strong value proposition

for its customers

Workhorse Medium-Duty Step Chassis: E-Gen – Range-

Extended Electric Vehicle and E-100 – Full Electric

Real-Time Telematics: cloud-based, database-driven proof-

of-performance system

HorseFly Delivery Drone: proprietary unmanned aerial

system designed for the package delivery market

• Capacity to produce 60,000 chassis per year

• Partners with Morgan Olson for the body of its step vans, the

same supplier for standard UPS trucks

• Proven deployment with premier delivery providers

3

WORKHORSE AT A GLANCE

Workhorse (“WKHS” or “the Company”) is a leading manufacturer of last-mile, cost effective delivery systems

Over 100 Workhorse vehicles on the road today, with another 245 orders in backlog

Provides range-extended electric vehicles for UPS, FedEx, and Alpha Baking Company, among others

Pre-qualified supplier for the U.S. Postal Service (“USPS”) Next Generation Delivery Program with its partner VT Hackney, a

multinational specialized body and cab company

• Proprietary technology protected by a strong patent portfolio

Six granted patents, with two additional patents pending

FOUNDED: 2007 // HEADQUARTERS: CINCINNATI, OHIO // EMPLOYEES AND CONTRACTORS: 100

EXCHANGE: NASDAQ // TICKER SYMBOL: WKHS


RECENT DEVELOPMENTS

4

Workhorse continues to deliver on its business plan and is poised for success going forward

Recent Business Highlights

• January 2016: Workhorse completes the first test delivery with its HorseFly Drone

• September 2016: UPS orders an additional 200 Workhorse electric vehicles as a follow-up order to its 125-unit order placed

in 2015

• September 2016: Workhorse and its partner VT Hackney are awarded entry to the USPS Next Generation Delivery Vehicle

Program

• October 2016: Workhorse signs a supply agreement with BMW for BMW i3 range extender units for the Workhorse E-Gen

step vans

• December 2016: Workhorse completes the year with a record 114 vehicle deliveries

Near-term Milestones

• Delivery of vehicles from Workhorse’s backlog

• Follow-up order from UPS and additional orders from new and existing customers, including the first commercial-scale order

from FedEx

• Expecting first customer delivery utilizing Workhorse’s HorseFly Drone

• Delivery of prototype electric vehicles to USPS in September 2017


WHAT WE DO

• Workhorse chassis is offered in two battery-powered electric models:

Workhorse E-GEN Range Extended Electric Vehicle delivers the

equivalent of 30+ mpg compared to the 5.5 mpg of conventional

fleet operators

Workhorse E-100 Full Electric is a highway-capable, 100% electric,

zero-emission vehicle that delivers approximately 100 miles of

range

• Both models utilize Panasonic Li-Ion batteries

• E-GEN benefits from a BMW REx engine

5

Workhorse is a technology company offering integrated products, enabling greater efficiency and profitability

1 23

4

Panasonic 18650 Li-ion Battery

Pack with integrated and

standard J1772 Charger

Workhorse W88

Straight-rail

ChassisBMW REx Internal

combustion engine

configured as on-

board Generator

Electric Motor

Direct-Drive =

No Transmission

Workhorse Step Vans

Workhorse W88 Chassis Layout – E-GEN Illustration

Workhorse Metron Telematics

HorseFly Delivery Drone

Cloud-based, database-driven

proof-of-performance monitoring

system that provides clients access

to real-time data to monitor,

measure the performance and give

fleet operators ultimate energy and

route efficiency

HorseFly™ is currently being developed

for the package delivery market and

other commercial applications

• Designed to comply with FAA guidelines

• Works in tandem with a Workhorse electric truck

• Delivers packages to remote locations while the driver continues on

the main delivery route, saving the fleet operator fuel costs and

increasing route efficiency


WORKHORSE WORKS WITH TIER-1 SUPPLIERS

6

Workhorse has successfully locked up best-in-class suppliers to ensure superior products

• Panasonic provides Workhorse

with their lithium-ion battery

technology

• In conjunction with Workhorse’s

onboard management system,

these products offer robust

performance in any duty cycle

or weather condition

• The BMW REx engine

integration helps make the

Workhorse E-GEN the most

cost-effective delivery truck on

the market

• The BMW REx engine

eliminates range anxiety by

providing the extended range

required by delivery fleets

• Prefix provides premier design

and engineering solutions

• Specializes in low volume

custom vehicle projects, designs,

prototyping, precision

machining, and testing, amongst

others


160,000

244,200

29,500

22,700

20,0007,000 5,000

Parcel Delivery

Services

Utilities /

Telecoms

Snack and Food

Delivery Services

Bakeries Uniform Rental,

Linen andLaundry Services

Beverage

Companies

Total

SIGNIFICANT MARKET OPPORTUNITY

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• Largest 50 commercial fleets of class 3-6 (medium-duty) vehicles represent more than 203,000

medium-duty vehicles

• Workhorse focuses on penetrating large, last-mile delivery fleets

• Management estimates 20,000 step van units ordered per year by fleets

Source: Automotive Fleet 500, 2013.

Core Focus Target Fleet Customers

Medium-Duty Vehicles by Market Segment


THE WORKHORSE VALUE PROPOSITION

• Low total cost of ownership can save fleets more than

$165,000 per vehicle over 20 years

• No vouchers required – three year ROI

• >400% fuel efficiency improvement – 6 MPG to 30+

MPGe

• >50% vehicle maintenance savings – no transmission,

regen braking reduces brake wear, etc.

• Low or zero emissions

• Additional upside via government incentive programs:

8

Total Cost of Ownership

Includes purchase price, infrastructure allowance, fuel and maintenance

$169,826

Savings

$0.07 per kWh

$57k Maintenance

$6,100 Infrastructure

$2.50/gallon go-

forward price

$120k Maintenance

Why Customers Choose Workhorse

$53.0

$133.8

$39.1

$303.6

$0

$50

$100

$150

$200

$250

$300

$350

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Tota

l C

ost

of

Ow

ners

hip (

in t

hous

and

s)

Year

E-GEN GAS


COMPETITIVE LANDSCAPE

9

Workhorse manufactures the only step van that addresses all four key features that fleets are seeking

Other Electric Vehicles

(Non-OEM)

Medium-Duty

Step Van P P P P

EV Drive Train P P

DurabilityHeavy duty, long

life-cycle componentsN/A

Conventional Fueled

Vehicles create

higher maintenance

costs

Conventional Fueled

Vehicles create

higher maintenance

costs

Lighter Design and

Build Quality

offering shorter life-

cycle

Design

Custom Chassis & 2

EV Power Train

options

N/A

Lacks innovation; No

EV option or Re-Gen

Breaking

Lacks innovation; No

EV option or Re-Gen

Breaking

Requires chassis

purchase from other

OEM

Environmental

Impact

Low Emission REx

Zero Emission All

Electric

N/A

Conventional fueled

vehicles have a

larger carbon

footprint

Conventional fueled

vehicles have a

larger carbon

footprint

Zero Emission All

Electric

Cost Efficiency

Lower fuel &

maintenance

Positive ROI in <4

years

No incentives

required

N/A

More than twice the

Total Cost-of-

Ownership over

expected life cycle

More than twice the

Total Cost-of-

Ownership over

expected life cycle

Higher initial

investment and more

expensive total cost-

of-ownership


CURRENT AND TARGET WORKHORSE CUSTOMERS

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Known for its reliability, Workhorse has established a blue-chip client base

Current Customers

Near-term Customer Opportunities


ESTABLISHED RELATIONSHIP WITH UPS

• April 2012: Workhorse signs agreement with Navistar to electrify UPS delivery trucks

• April 2015: UPS deploys 2 Workhorse E-GEN range-extended vehicles purchased

directly from Workhorse in 2014

• July 2015: Workhorse begins delivery of 18 Workhorse E-100 All-Electric vehicles

purchased by UPS in 2014

• September 2015: Workhorse receives order from UPS for additional 125 Workhorse

electric vehicles, of which 91 have been delivered to 26 depots across 8 states

through December 2016

• October 2015: UPS announces the deployment of 18 Workhorse electric, zero-

emission delivery vehicles to Texas

• October 2016: UPS orders 200 additional Workhorse electric vehicles, expected to

be deployed beginning in Q1 2017

Source: UPS.

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• Headquarters: Atlanta, GA

• 2015 Delivery Volume: 4.7 billion

packages and documents

• Daily Delivery Volume: 18.3 million

packages and documents

• Delivery Fleet: 104,926 package cars,

vans, tractors, and other vehicles

• Alternative Fuel Fleet: 7,700 alternative

fuel and advanced technology vehicles

“These vehicles are a bridge to the delivery trucks of tomorrow. This investment will

help create and grow the market for ground-breaking alternative propulsion systems

that reduce environmental impact, reduce operating costs and save fuel.”

- Mark Wallace, UPS Senior VP Global Engineering and Sustainability


ADDITIONAL CURRENT CUSTOMER RELATIONSHIPS

Relationship Overview

• October 2016: Workhorse range-extended vehicle integrated a hydrogen fuel cell for the FedEx

Express/DOE Hydrogen Fuel Cell Extended-Range Battery Electric Vehicle project (Award Number: DE-

EE0006522)

• February 2015: Alpha Baking Company ordered 5 Workhorse E-GEN step vans

• November 2016: Initial Workhorse E-GEN pilot vehicle delivered

• September 2016: Unites States Postal Service awarded a contract for six prototype Next Generation

Delivery Vehicles (NGDV) to the VT Hackney – Workhorse team as part of the NGDV acquisition process

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Workhorse has achieved commercial success with multiple leading customers

30,000 Step Vans

400 Step Vans

7,000 Step Vans

180,000 Vehicles


UNITS SHIPPED

Source: The Company.

1) Q4 2016 figure is preliminary.

13

Workhorse has seen significant shipment growth since the beginning of 2016

Workhorse Historical and Projected Unit Shipments

3

18

36

57

0

10

20

30

40

50

60

Q1 2016A Q2 2016A Q3 2016A Q4 2016E

Units

Ship

ped

1


NEAR-TERM PRODUCTS IN DEVELOPMENT

• The USPS intends to retire its fleet of 180,000 vehicles and

replace them with Next Generation Delivery Vehicles (NGDV)

• In September 2016, the VT Hackney – Workhorse team was one

of six suppliers awarded a prototype contract to build six

delivery vehicles as part of the next phase of the NGDV

acquisition process

• Prototypes are scheduled for September 2017 delivery, with the

formal decision expected six months later

• This opportunity represents a $6.3+ billion fleet refresh starting

in 2019

14

Workhorse plans to capitalize on two large upcoming market opportunities

• Workhorse is developing the Workhorse W-15, the US’ first

light-duty pickup truck with electric powertrain aimed at

commercial fleets

• The development of the pickup will leverage the R&D performed

for the USPS award, greatly accelerating the production process

• Target customers include delivery fleets, utility companies,

telecom companies, municipalities and more

• Received nearly 1,000 pre-orders (non-binding Letters of Intent)

to-date

Workhorse W-15 Work TruckU.S. Postal Service Award


EXPERIENCED MANAGEMENT TEAM

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The Workhorse team brings years of experience in technology and engineering

Stephen Burns, Founder, CEO & Director

Mr. Burns has founded several companies, most recently iTookThisOnMyPhone.com, a leading mobile photo and

video-sharing technology company, MobileVoiceControl, Inc. sold to Nuance Communications, Inc. in 2006,

AskMeNow [OTCC:AKMN] a mobile search and information delivery system sold to Ocean West Holdings in

2005, PocketScript sold to ZixCorp [NASDAQ:ZIXI] in 2002, Over The Line/AdLink, sold to Gannett Co. Inc.

(NYSE:GCI) in 1994 and the design and development of Suspension Parameter Measurement Machines.

Duane Hughes, President / COO

Mr. Hughes is a senior-level executive with more than 20 years experience including direct business relationships

in the automotive, advertising, and technology segments. Prior to joining Workhorse/AMP Electric Vehicles,

Duane served as Chief Operating Officer for Cumulus Interactive Technologies Group. Prior to Cumulus ITG,

Duane spent nearly fifteen years in senior management positions with Gannett Co., Inc., including his duties as

Vice President of Sales and Operations for Gannett Media Technologies International.

Julio Rodriguez, CFO

Mr. Rodriguez has over 25 years of finance and accounting experience in the automotive and food industries

most recently at Genuine Parts Company, a distributor of automotive aftermarket parts and at Federal Mogul

an OEM parts manufacturer. Mr. Rodriguez has held multiple executive positions including CFO, VP of Finance,

Director of Finance, Controller and Audit Manager at corporate headquarters and subsidiary levels. Mr.

Rodriguez started his career in public accounting with Arthur Andersen.

Don Wires, Director of Engineering

Prior to AMP, Mr. Wires worked at P&G for 35 years where he was the first Technology Associated Director for

Power, Control, & Information Systems. Mr. Wires is co-author of several patents on machine automation and

safety systems, and an early leader in developing a mechatronics approach to complex machine design at

P&G. He is the first Engineering Technology Distinguished Alumni Graduate of the University of Cincinnati

College of Engineering and Applied Science.


RECENT DEVELOPMENTS

16

Workhorse continues to deliver on its business plan and is poised for success going forward

Recent Business Highlights

• January 2016: Workhorse completes the first test delivery with its HorseFly Drone

• September 2016: UPS orders an additional 200 Workhorse electric vehicles as a follow-up order to its 125-unit order placed

in 2015

• September 2016: Workhorse and its partner VT Hackney are awarded entry to the USPS Next Generation Delivery Vehicle

Program

• October 2016: Workhorse signs a supply agreement with BMW for BMW i3 range extender units for the Workhorse E-Gen

step vans

• December 2016: Workhorse completes the year with a record 114 vehicle deliveries

Near-term Milestones

• Delivery of vehicles from Workhorse’s backlog

• Follow-up order from UPS and additional orders from new and existing customers, including the first commercial-scale order

from FedEx

• Expecting first customer delivery utilizing Workhorse’s HorseFly Drone

• Delivery of prototype electric vehicles to USPS in September 2017


INTELLECTUAL PROPERTY

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The asset purchase of Workhorse Custom Chassis in March 2013 included several patents, schematics, CAD files, design documents, bill of materials, and rights to all vehicles including the W22, W42, W62, W88 and LF72 chassis. Workhorse also received documents and descriptions related to plant operations personnel, staffing and procedures.

Abstract: A vehicle chassis assembly includes a frame assembly having a plurality of frame members connected together, a

drivetrain, a suspension system, and an exhaust system. The connection of the frame members provides a low-profile

configuration for reduced step height and a kick-up portion to allow ascent of steeper inclines. The frame further includes an

exhaust pipe supported within a frame member and two castings bolted to removable wheel arches. The exhaust pipe has a

circular cross-section that changes to a rectangular cross-section near the back of the chassis assembly.

D6069, 11/252220, US7717464

Abstract: A vehicle chassis assembly includes a frame assembly having a plurality of frame members connected together, a

drivetrain, a suspension system, and an exhaust system. The connection of the frame members provides a low-profile

configuration for reduced step height and a kick-up portion to allow ascent of steeper inclines. The frame further includes an

exhaust pipe supported within a frame member and two castings bolted to removable wheel arches. The exhaust pipe has a

circular cross-section that changes to a rectangular cross-section near the back of the chassis assembly.

D6053, 11/252219, US7559578

D6070, 29/243129, D561079 Design patent for a vehicle header.

D6071, 29/243074, D561078 Design patent for a vehicle header.

2523653 (Canada) Vehicle chassis assembly.

US 8541915 B2 A coolant fluid distributing manifold for a drive module in an electric motor drive assembly.

US 9,481,256 SN: 14,606,497 Onboard generator drive system for electric vehicles that share an electric motor for both propulsion and generation.

Workhorse Technologies current and pending patents, service marks and trademarks

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