Workhorse Group, Inc. · NASDAQ:WKHS
Workhorse — Investor Day (December 2022)
78 slides from Workhorse's investor day presentation, Dec 7, 2022
Slide 1: Analyst Day 2022
> People Process Plant Product LL ANALYST DAY 2022
Slide 2: Union City, Indiana December 7, 2022 Analyst Day
Union City, Indiana December 7, 2022 Analyst Day
Slide 3: Agenda
© Copyright 2022 Workhorse. Confidential & Proprietary | 3 Agenda • Welcome/Introduction • CEO Perspective • Technology Overview • CV Overview • Aerospace Overview • Stables & Stalls Overview • Break • Finance Overview • Q & A Panel • Lunch/Plant Tour • Ride and Drives/ Drone Demo
Slide 4: Forward-looking statements
The material in this document contains forward - looking statements reflecting our current expectations that involve risks and uncertainties. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. When used in this document, the wor
Slide 5: Why We are Here Today
Why We are Here Today ▪ Review the Progress We Have Made Rebuilding our Foundation – Introduce our revamped leadership team – Review steps we have taken to “Stabilize & Fix” the business and strengthen financial foundation ▪ Demonstrate Our Capabilities and Our Product Roadmap – Provide updates on o
Slide 6: Workhorse Today
Workhorse Today ▪ Differentiated commercial EV business with a clear product roadmap, value - added offerings ▪ Drone business targeting specific, high growing market segments ▪ Enhanced manufacturing facilities in the heartland of America ▪ Strengthened financial foundation to fuel growth Focused o
Slide 7: The Commercial EV Space – a Tale of Two Cities
The Commercial EV Space – a “Tale of Two Cities” Sector leadership & survival comes down to SUCCESSFUL EXECUTION © Copyright 2022 Workhorse. Confidential & Proprietary | 7 ▪ Government Regulatory and Macroeconomic Industry Tailwinds – On - Line commerce and delivery demand >20% CAGR – Stringent CARB
Slide 8: Value Creation For ALL Stakeholders
Value Creation For ALL Stakeholders ▪ Associates ▪ Investors ▪ Communities ▪ Customers ▪ Suppliers ▪ Business Partners Building the foundations for two profitable businesses Profitably Grow Organically, M&A 15% Competitive Cost Structure, Common LEAN Systems 30% CORE vs. Non - CORE Decisions Keep &
Slide 9: Experienced, capable leadership
Experienced, capab l e l e a de r sh ip Robert “Bob” Ginnan Josh Anderson Jim Harrington Stan March Kerry Roraff Ryan Gaul Jim Peters John Graber Chief Financial Officer Chief Technology Officer Chief Compliance Officer, Gen Counsel VP, Corp. Development & Communications Chief Human Resources Office
Slide 10: Market Driven Product Programs
Market Driven Product Programs Design, Test, Source Components and Build Industry Leading Products MAR 22 Wixom Tech Center MAY 22 Technical Team in Place SEP 22 W 4 CC SORP NOV 22 W56 Pr og r am Builds DEC 22 HALO Final Flight Testing Horsefly Advanced Flight Testing W750 Run - at - Rate Builds MA
Slide 11: World Class EV & Drone Manufacturing Sites in America's Heartland
© Copyright 2022 Workhorse. Confidential & Proprietary | 11 © Copyright 2022 Workhorse. Confidential & Proprietary | 11 World Class EV & Drone M anufa c turing Sites in America’s Heartland Workhorse Ranch: “Ready to Run” ▪ MFG complex capacity 10,000 trucks/yr by 2025 ▪ Multiple classes of EVs ▪ Ded
Slide 12: Foundation for Growth Established
Foundation for Growth Established ▪ Strengthened Organization – Hired an experienced corporate leadership team – Doubled CV and Aero technical staffs – LEAN trained operational staff (MFG, SC, Quality) – Auto, CV and Aerospace industry expertise ▪ Executing Product Roadmaps – Class 3 - 6 CV last - m
Slide 13: Near-term Priorities
Near - term Priorities Implement Common Systems ▪ Corporate administration – ERP (Q3 ‘23), HRM ▪ LEAN systems across manufacturing and supply chain Execute Product Programs ▪ Complete pilot production of W750 ▪ Maintain W56 program timing ▪ Complete C1000 testing ▪ Complete Horsefly and HALO flight
Slide 14: Stabilizing, Fixing and Growing Workhorse
Stabilizing, Fixing and Growing Workhorse ▪ We have made progress rebuilding our foundation ▪ We have enhanced our capabilities and are moving forward with an actionable product roadmap ▪ We are relentlessly focused on execution and have a strong financial foundation to fuel our plans Workhorse is c
Slide 15: Ready to Run & Fly
© Copyright 2022 Workhorse. Confidential & Proprietary | 15 © Copyright 2022 Workhorse. Confidential & Proprietary | 15 “Ready to Run & Fly”
Slide 16: Analyst Day 2022
> People Process Plant Product LL ANALYST DAY 2022
Slide 17: Technology and Trends
&p People Process Plant Product WORKHORSE” Technology and Trends
Slide 18: Agenda
© Copyright 2022 Workhorse. Confidential & Proprietary | 18 Agenda • Workhorse History and EV Commitment • Workhorse Design Process • Workhorse Product Roadmap • Workhorse Next Gen
Slide 19: Two Decades of EV and Chassis Technology
© Copyright 2022 Workhorse. Confidential & Proprietary | 19 Two Decades of EV and Chassis Technology Workhorse Workhorse Custom AMP Electric eGen Electric Chassis Horsefly C Series Monocoque W56 Ground - up Custom Chassis Chassis acquired vehicles acquires the produced with 360+ units development be
Slide 20: Pioneering the Transition to Zero-Emission Commercial Vehicles
© Copyright 2022 Workhorse. Confidential & Proprietary | 20 Pioneering the Transition to Zero - Emission Commercial Vehicles ▪ What is our product design philosophy? – Reliable, dependable delivery. Every time – Delight the customer – Be the best in what we do ▪ How do we achieve our goals? – Drive
Slide 21: Phase Gate Process
Phase Gate Process Program Management ▪ Drive programs through the Product Development Process (PDP) ▪ Resource management ▪ Product strategy ▪ Coordination to ensure program win and execution Market Insight & Strategy Gate 0 1 0 3 2 5 4 7 6 Initi at i on Review Customer Relationships and Support Ph
Slide 22: Serves the Largest Segments of the CV Market
Serves the Largest Segments of the CV Market 2022 2023 2024 2025 2026+ Aerial D eli v ery Drone Body T y pes Class 3 Bus Local Delivery Van Class 4 - 5 Service/Utility Truck Last Mile Delivery Local Delivery Step Van Class 6 - 7 Local Delivery Step Van Local Delivery Box Truck Local Reefer Box Truck
Slide 23: W4 CC & W750 Highlights
W4 CC & W750 Highlights Available to Deliver Today: ▪ Early start to EV transition to meet customer sustainability goals ▪ Take advantage of incentive funding ▪ Zero - emission vehicle ▪ Improved TCO ▪ No noise pollution ▪ Better uptime ▪ Energy cost savings The W4 CC/W750 is a zero - emission vehic
Slide 24: W750 Process/Design Confirmation
W750 Process/Design Confirmation Process confirmation builds taking place with plant and engineering on - site to complete the build while documenting issues and creating work instructions. © Copyright 2022 Workhorse. Confidential & Proprietary | 24
Slide 25: W56 Highlights
W56 Highlights SORP Q3 2023 © Copyright 2022 Workhorse. Confidential & Proprietary | 25 The W56 is a fully capable medium duty chassis designed for last - mile delivery, high payload applications ▪ Class 5/6 rated, up to 150 - mile range ▪ Battery 210 kWh ▪ C hargin g : A C ( 1 1 k W) & D C (60kW) ▪
Slide 26: W56 Benchmarking
▪ Design Process Example: – Benchmarking to industry standards and vehicle owner expectations for step van packages – Competing products were measured and evaluated to establish “state of the art” baseline ▪ Resulting W56 Design Achieves “Best in Class” in: – V ision – D o w n w ard A ngle and Late
Slide 27: W56 Program Build Process
W56 Program Build Process ▪ 13 Program Vehicle Builds began 11/1 and conclude 3/1 ▪ Build 1 Mfg. golden sample ▪ Build 2 long term durability – through Q2 23 ▪ Subsequent Builds for specific test programs ▪ All vehicles maintained to latest design record ▪ Validation, testing, sales and marketing bu
Slide 28: W56 Chassis Design
W56 Chassis Design Battery Thermal Management system Upper batteries offset toward passenger side to enable driver visibility improvement C able Management Trays Power Distribution Unit (PDU) includes DC - DC Converter E - axle rear drive COTS rear suspension Unique spring rates COTS front suspensio
Slide 29: W56 Body Design
W56 Body Design Cargo Box: Composite walls with aluminum extruded supports Operator Ergonomics: Representative buck created for testing Cab Structure: Molded Composite panels with aluminum extruded structure Rear Door: Full Width x Full Height (86”x76”) shutter door Cab Surface: Clean, updated tradi
Slide 30: Horsefly Highlights
Horsefly ΠHighlights Building to Aerospace Standards Package Delivery : Changing How the World Delivers Truck Integration Precise Delivery System Dynamic Data Collection: Make Informed, Rapid Decisions Multispectral Cameras LiDAR Sensors User - friendly flight planning Define safety - compliant no
Slide 31: METRON Vehicle Telematics
METRON Vehicle Telematics • Watch a vehicle live or check historical trips • Check trip aggregate data and graphical data • SOC, Speed, Distance, Energy Used, Battery Temps, Battery Voltages, Battery Current, Estimated Range, Estimated Time to Charge Complete • Customize graphs displayed • Over 2500
Slide 32: Metron 2.0 Overview
© Copyright 2022 Workhorse. Confidential & Proprietary | 32 Metron 2.0 Overview Tomorrow into 2024: ▪ Fleet management suite to help customers optimize their vehicles ▪ Maintenance tracking database and interface portal linked to work tickets and parts system ▪ Connection interface to bridge to comp
Slide 33: Serves the Largest Segments of the CV Market
© Copyright 2022 Workhorse. Confidential & Proprietary | 33 Serves the Largest Segments of the CV Market 2022 2023 2024 2025 2026+ Aerial D eli v ery Drone Body T y pes Class 3 Bus Local Delivery Van Class 4 - 5 Service/Utility Truck Last Mile Delivery Local Delivery Step Van Class 6 - 7 Local Deliv
Slide 34: Analyst Day 2022
> People Process Plant Product LL ANALYST DAY 2022
Slide 35: Commercial Vehicles Business
Commercial Vehicles Business
Slide 36: Agenda
© Copyright 2022 Workhorse. Confidential & Proprietary | 36 Agenda • Pillars of Execution • Market and Products • W orkhorse A d v an t ages • What’s Next in the Commercial Vehicles Business 36
Slide 37: Commercial Vehicles Business Advantages
Plant and Process ▪ Automotive - grade supply chain ▪ Production ready - to - run ▪ Room to grow © Copyright 2022 Workhorse. Confidential & Proprietary | 37 People ▪ Trained team at Workhorse Ranch (Factory) ▪ 100 ’s of years of vehicle engineering and launch experience at locations in the heart of
Slide 38: Strong, Capable Teams – Experienced Leaders
Strong, Capable Teams – Experienced Leaders ▪ Built out the team, adding talent and leadership at all levels ▪ Added new locations to access needed talent pools ▪ Ensured we have the software and hardware tools to enable the success of our teams Sales and Service ▪ Initial effort follows incentives
Slide 39: Strong, Experienced Leadership Team
R y a n G aul President, Commercial Vehicles Josh Anderson Chief Technology Officer Jim Peters Vi ce P r esident Supply Chain & Procurement Brad Hartzell VP Manufacturing & Program Mgmt Scott Loomis Executive Director Quality Dave Bjerke VP Product Development Surya Sundaram Director Purchasing & Su
Slide 40: Workhorse Products Serve the Largest Segments of the CV Market
Workhorse Products Serve the Largest Segments of the CV Market ▪ Workhorse product lines provide comprehensive market coverage within the Commercial Vehicle Market. We are targeting a TAM of > $15B. ▪ Workhorse’s Commercial Vehicle business is scaled to be cash - positive even at small market - shar
Slide 41: Incentive Landscape and Key Markets
Incentive Landscape and Key Markets West Coast ▪ California HVIP, $690M, CL4 $40k CL5/6 $60k South Central ▪ Texas 10 programs, $65M, 80% of vehicle and/or 25 units East Coast ▪ New York / NJ 2 voucher programs, $77M, CL4 $75k CL5 $85k CL6 $100k Incentives continue to be critical to sales of EVs and
Slide 42: California HVIP vouchers
© Copyright 2022 Workhorse. Confidential & Proprietary | 42 4,300+ ZEV California HVIP vouchers submitted in 2021/22 ▪ Despite the large number of vouchers awarded by California HVIP, 93.3% remained unredeemed by October 2022. ▪ The majority of redeemed vouchers (72%) are for buses. ▪ Nobody is deli
Slide 43: W4 CC & W750 Highlights
Available to Deliver Today: ▪ Early start to EV transition to meet customer sustainability goals ▪ Take advantage of incentive funding ▪ Zero - emissions ▪ Improved TCO ▪ No noise pollution ▪ Better uptime ▪ Energy cost savings The W4 CC/W750 is a zero - emissions vehicle, designed to haul various c
Slide 44: W56 Product Update
W56 Product Update Launching Q3 2023 CL5 - 6, Best - in - Class payloads, up to 150 - mile range ▪ Program vehicle builds have begun. First is complete and next builds underway. ▪ Building 12 vehicles in the next six months for testing and ensuring we have the right parts, assembly process, training
Slide 45: Workhorse Care for Fleets – Uptime Guarantee
Preventive & Corrective Maintenance Service Software & Remote Diagnostics Parts Replacement Reporting Performance Service Level Agreements (SLAs) Flexible corrective warranty determination and regular preventive maintenance ensures high vehicle performance and prevents equipment issues Remote monito
Slide 46: Room to Grow
Room to Grow 212K square feet of production space, 218K square feet of material storage space, test track, customer experience center, vehicle storage on almost 100 acres of land. The Workhorse Ranch has plenty of room for future expansion. © Copyright 2022 Workhorse. Confidential & Proprietary | 46
Slide 47: 2023-2024 Product Plans
Vehicle launches will continue throughout 2023, 2024 and 2025, consisting of both model year changes, and new vehicle launches 2023 - 2024 Product Plans © Copyright 2022 Workhorse. Confidential & Proprietary | 47
Slide 48: Commercial Vehicles Business Advantages
Plant and Process ▪ Automotive - grade supply chain ▪ Production ready - to - run ▪ Room to grow © Copyright 2022 Workhorse. Confidential & Proprietary | 48 People ▪ Trained team at Workhorse Ranch (Factory) ▪ 100 ’s of years of vehicle engineering and launch experience at locations in the heart of
Slide 49: Analyst Day 2022
> People Process Plant Product LL ANALYST DAY 2022
Slide 50: Aero Orientation
&p People Process Plant Product WORKHORSE” Aero Orientation
Slide 51: Growing Business Targeting Large Addressable Markets
Growing Business Targeting Large Addressable Markets ▪ The market demands it = OPPORTUNITY! ▪ Sustainability & cost in the last mile drives it ▪ Two market segments growing significantly – Package delivery – Agricultural & infrastructure data ▪ Capable, high - quality products – Safe and compliant –
Slide 52: People and Experience
People and Experience 275 years specific aerospace experience on the team 20+ years of C - level experience in public and private aerospace industry. Former President & CEO of Global Aviation Holdings. John Graber President, Workh o r s e A ero Mi k e G e r des VP, Flight Operations and Engineering
Slide 53: 5+ Years in Development
5+ Years in Development ▪ Safe, reliable family of aircraft and systems – High quality construction – FAA - compliant design, procedures, manuals, and training ▪ Carry a significant payload for a significant distance ▪ Winch and servo payload delivery systems ▪ Package delivery and sensor operations
Slide 54: Aircraft and Systems
© Copyright 2022 Workhorse. Confidential & Proprietary | 54 Aircraft and Systems ▪ Ability to fly in the National Airspace System (NAS) ▪ Small Uncrewed Aerial Systems (sUAS) – A special category under the FAA regulations – < 55 pounds max weight – < 100 MPH – < 400’ above ground level maximum altit
Slide 55: Horsefly
Horsefly Œ ▪ Carries up to 10 pounds 10 miles ▪ In the FAA type certification pipeline since 2020 ▪ Delivers and picks up with a 30’ winch or rapid - drop servo ▪ 45 - minute flight time (20 knots with ISR sensors) ▪ Metron Air (patent pending); Software - as - a - Service (SAAS), supports Beyond Vi
Slide 56: Falcon Aircraft
Falcon Aircraft ▪ 142 days from initial concept to completed product ▪ Humanitarian Aid and Logistics Operations (HALO) ▪ Ruggedized construction for austere conditions – Emphasizes payload (> 10 pounds) & range (> 10 miles) – Simple package delivery servo – Heavy - duty tactical cowling – Enhanced
Slide 57: The Global Opportunity
The Global Opportunity Worldwide civil drone production will more than triple by 2029. - Teal Group, 2021 © Copyright 2022 Workhorse. Confidential & Proprietary | 57
Slide 58: Early Innings of Growing Demand
Early Innings of Growing Demand “Rising use of drones, advancements in technology, and relaxation in government policies will likely drive growth of the drone delivery services market.” - Future Markets Insights, 2022 Source: Teal Group: World Civil UAS Market Forecast 2020/21 Edition © Copyright 20
Slide 59: A Logistics Company Example
A Logistics Company Example ▪ Volume supports > 1,000,000 drone deliveries per day ▪ Implies a drone fleet thousands of aircraft ▪ UPSFF was the first FAA - certified Part 135 “Drone Airline” ▪ Operating in Florida, Kentucky, and North Carolina All major delivery companies are working to expand dron
Slide 60: Agriculture is a More Mature Market
Agriculture is a More Mature Market Demand grows as farmers, governments and others use big data Teal Group: World Civil UAS Market Forecast 2020/21 Edition © Copyright 2022 Workhorse. Confidential & Proprietary | 60
Slide 61: Workhorse Aero Federal & State Partnership Program
© Copyright 2022 Workhorse. Confidential & Proprietary | 61 © Copyright 2022 Workhorse. Confidential & Proprietary | 61 W orkhorse A ero Advanced Air Mobility & Scanning Federal & State Partnership Program NORTH DAKOTA A RKA N S A S MISSISSIPPI O H IO BVLOS / AAM USDA NRCS LiDAR and Multi Spectral s
Slide 62: LiDAR surveys
▪ Extremely accurate surveys – Spans – Heights – Relief – Measurement across every axis ▪ Find levee and dam issues earlier ▪ Land and plant elevations ▪ Erosion and runoff LiDAR Light Detection and Ranging …create precise, fresh, usable data about the land © Copyright 2022 Workhorse. Confidential &
Slide 63: USDA NRCS R&D Project – Recent UAV Imaging
USDA NRCS R&D Project – Recent UAV Imaging ▪ Elevation models of the ground and objects in the area ▪ Allows calculation of the area and risk to structures near the levy if a failure were to occur ▪ Detect obstructions in drainage systems ▪ RGB data overlay provides an excellent understanding of all
Slide 64: Competitor Comparison
Competitor Comparison Workhorse Horsefly and Falcon have industry - leading payload to weight ratios for 4 - rotor sUAS “Quad Copter” Market Demand Horsefly / Falcon Competitors Workhorse Advantage Payload 10 lbs. Average 5.5 lbs. 90% Greater Payload Range 10 miles 45 mins Average 7 miles Average 32
Slide 65: We are well positioned
© Copyright 2022 Workhorse. Confidential & Proprietary | 65 We are well positioned © Copyright 2022 Workhorse. Confidential & Proprietary | 65
Slide 66: Established Our Factory Floor
Established Our Factory Floor ▪ Mason, OH ▪ 75,000 sq. ft. facility ▪ Initial cadre of assembly associates in initial training ▪ Facility supports every required discipline ▪ SORP Q2 2023 ▪ Production capacity greater than 5,000 units in 2025 © Copyright 2022 Workhorse. Confidential & Proprietary |
Slide 67: Summary
Summary ▪ Our team has deep aerospace expertise ▪ Differentiated and complementary product lines ▪ High - quality systems – Carry more – Carry it farther – Quieter ▪ Strong demand in package delivery and data acquisition marketplaces ▪ Entering SORP Q1 2023 © Copyright 2022 Workhorse. Confidential &
Slide 68: Analyst Day 2022
> People Process Plant Product LL ANALYST DAY 2022
Slide 69: Stables & Stalls
&p People Process Plant Product WORKHORSE” tnt Stables & Stalls
Slide 70: Stables & Stalls fleet electrification platform
▪ Created a subsidiary that owns a local FedEx Ground delivery contract in Lebanon, Ohio. Includes 10 internal combustion engine trucks and vans ▪ Leased a maintenance and service facility, or ‘Stable,’ adjacent to FedEx Lebanon distribution facility and installed 10 Level 2 EV chargers, the ‘Stalls
Slide 71: Overview of Stables by Workhorse
Overview of Stables by Workhorse © Copyright 2022 Workhorse. Confidential & Proprietary | 71 ▪ Location supporting last mile delivery hubs – Charging stations – Maintenance bay (mobile serviced) – Driver lounge ▪ Independent contractor (IC) IT platform – Target smaller, independent fleets (10 - 50 v
Slide 72: Key Workstream/Initiatives to Implement Roadmap
Key Workstream/Initiatives to Implement Roadmap © Copyright 2022 Workhorse. Confidential & Proprietary | 72 FedEx has 500+ Ground stations and 120+ Hubs as part of Ground network, operated by ~5,300 independent contractors with ~75,000 - 100,000 vehicles, where ~80% are dedicated to “last mile” pack
Slide 73: Analyst Day 2022
> People Process Plant Product LL ANALYST DAY 2022
Slide 74: CFO Overview
WORKHORSE” CFO Overview
Slide 75: Recent Steps to Strengthen Financial Position
Recent Steps to Strengthen Financial Position © Copyright 2022 Workhorse. Confidential & Proprietary | 75 Removing overhang and creating foundation for growth Over the past 16 months, the new management has taken significant steps to stabilize the Company’s financial position: • Created debt - free
Slide 76: Current Financial Position
Current Financial Position Providing stability and resources to execute on our product roadmaps Monthly net cash requirements of $9 million D E BT Z ero debt © Copyright 2022 Workhorse. Confidential & Proprietary | 76 $120M in cash and cash equivalents Access to additional $175M via A T M
Slide 77: Positioned for Growth
Positioned for Growth © Copyright 2022 Workhorse. Confidential & Proprietary | 77 Focused on near - term execution and maintaining solid financial position to drive growth ▪ Refining 2022 guidance: – Expect to manufacture and deliver approximately 25 - 100 vehicles – Expect to generate between $5 an
Slide 78: Analyst Day 2022
> People Process Plant Product LL ANALYST DAY 2022