Workhorse Stock Slips As Merger With Motiv Sparks Dilution Concerns

Fri, Aug 15, 2025, 12:26 PM 3 min read

Workhorse Group (NASDAQ:WKHS) stock is trading lower on Friday despite upbeat second-quarter results and its Motiv Electric Trucks merger deal.

The company reported second-quarter sales of $5.7 million, up by 573.0% year-over-year, topping the analyst consensus estimate of $2.3 million.

However, it struggled for profitability, reporting quarterly EPS loss of $1.67, beating the analyst consensus estimate loss of $3.98.

Also Read: Workhorse Stock Jumps After Reviving Merger Talks With Electric Vehicle Maker

Cost of sales rose 78.8% to $13.1 million. Loss from operations improved to $(14.5) million from $(20.5) million a year ago.

As of June 30, 2025, the company held $2.2 million in cash and equivalents.

Workhorse CEO Rick Dauch noted the company shipped a record 32 trucks in the quarter, fueled by the strong performance of its W56 step vans.

Dauch said the company also reached an agreement to merge with Motiv Electric Trucks to form a leading North American medium-duty electric truck OEM.

Workhorse and Motiv Electric Trucks signed a definitive all-stock merger agreement to form a leading North American medium-duty electric truck OEM valued at approximately $105 million.

View more earnings on WKHS

Under the deal, Motiv's controlling investor will own about 62.5% of the combined company, Workhorse shareholders will hold roughly 26.5%, and Workhorse's senior secured lender will have rights to about 11% on a fully diluted basis, all subject to adjustments and future dilution.

Workhorse merged a newly created subsidiary with Motiv in exchange for newly issued Workhorse common shares. Certain Motiv stockholders who held its debt agreed to cancel those obligations in exchange for Workhorse equity.

Alongside the merger, Workhorse completed a $20 million sale-leaseback of its Union City, Indiana, manufacturing plant and secured $5 million in convertible note financing from entities tied to Motiv's controlling investor, providing near-term liquidity and enabling partial debt repayment.

At closing, Workhorse will repay or cancel all remaining obligations to its senior secured lender, leaving only the $5 million secured convertible note held by Motiv's controlling investor, which could convert to equity in a post-closing financing.

Motiv's controlling investor also committed to provide $20 million in debt financing at closing, $10 million via a revolving credit facility and $10 million in an ABL facility for manufacturing costs tied to confirmed orders.

The combined company plans to expand its Class 4-6 truck lineup, leverage scale to lower unit costs, and pursue additional equity financing to support strategic execution.