Work Ahead Investor Presentation September 2018 NASDAQ: WKHS

Transcription

1 1 Work Ahead Investor Presentation September

2 2 Working how you always have can only get you so far. 2

3 3 Workhorse is changing the way the world works. 3

4 4 Cautionary Note Regarding Forward Looking Statements This presentation includes forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of These statements may be identified by words such as "believes," "expects," "anticipates," "estimates," "projects," "intends," "should," "seeks," "future," "continue," or the negative of such terms, or other comparable terminology. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from the forward-looking statements contained herein. Factors that could cause actual results to differ materially include, but are not limited to: our limited operations and need to expand in the near future to fulfill product orders; risks associated with obtaining orders and executing upon such orders; the ability to protect our intellectual property; the potential lack of market acceptance of our products; potential competition; our inability to retain key members of our management team; our inability to raise additional capital to fund our operations and business plan; our inability to maintain our listing of our securities on the Nasdaq Capital Market; our ability to continue as a going concern; our liquidity and other risks and uncertainties and other factors discussed from time to time in our filings with the Securities and Exchange Commission ("SEC"), including our annual report on Form 10-K filed with the SEC. Workhorse expressly disclaims any obligation to publicly update any forward-looking statements contained herein, whether as a result of new information, future events or otherwise, except as required by law.

5 5 Investment Highlights A Leading U.S. Commercial Electric Vehicle OEM Market Leader with Proven Track Record Large Addressable Markets with Significant EV Demand Proven Economic Value Proposition Blue Chip Customer Base and World Class Partners Proprietary Platform Technologies Leveraged Across Vehicle Portfolio Nearly 400 vehicles in operation with more than 3 million miles driven Multiple orders placed by industry leading customers such as UPS Last-mile delivery-as-a-service pilot initiated with major Blue Chip customer Only U.S. OEM all-electric vehicle option in $16B+ delivery/cargo van market First mover in multi-billion electric pickup truck market (~500,000 of 2.8M vehicles sold for commercial use) One of five finalists in USPS Next-Gen Delivery Vehicle (NGDV) program ($6 billion/180,000 vehicles) Positive total cost of ownership at ~3 years without incentives Vehicle acquisition cost near price parity with conventional gas/diesel vehicles 70% savings in fuel expense, ~400% improvement in fuel efficiency Existing and target customers include UPS, FedEx, Duke Energy, AEP, DHL, and many others Tier-one supply chain, service and infrastructure partners include Panasonic, BMW and Ryder Battery, drive train, chassis, software, telematics platform technologies leveraged across all vehicle designs Strong patent portfolio (6 patents granted and 2 additional pending) Recent HorseFly TM patent covers any drone utilization with delivery vehicle Scalable Manufacturing, Growth Capital in Place with Clear Path to Profitability Manufacturing capability of 60K vehicles/year (single shift), scalable to 100K with minimal CapEx N-GEN, W-15 vehicles gross material margin positive from first production vehicle Path to cash flow positivity and profitability well-defined

6 6 Recent Milestones 1,000+ Vehicle Backlog First N-GEN Vehicles Deployed in Last-Mile Delivery Pilot HorseFly Package Drone Delivery Pilot Underway HorseFly Patent Granted Covering Any Drone Utilization with a Delivery Vehicle Testing Ongoing as One of Five Finalists for the $6B United States Postal Service Next- Generation Delivery Vehicle Replacement Program (USPS NGDV) Contract $300M in Pre-orders for 5,500 W-15 Electric Pickups SureFly TM Multi-copter First Flight, Enters FAA Type Certification Process

7 7 Changing the Way the World Works Efficient, Profitable, Sustainable Commercial Transportation HorseFly UAV Delivery System SureFly Hybrid Electric Multi-copter Founded 2007 NASDAQ WKHS American OEM E-Series Electric and Range- Extended Electric Step Vans N-GEN Electric Work Vans USPS Next Generation Delivery Vehicle (NGDV prototype) W-15 Range-Extended Pickup

8 Total Cost of Ownership (in thousands) 8 Total Cost of Ownership* Includes purchase price, infrastructure allowance, fuel and maintenance *Source: Workhorse customer supplied data for the E-GEN Step Van. Proven Fleet Economic Savings $350 Three Million Miles of Customer Experience, 400+ Vehicles $300 E-GEN $0.07/kWh $57K Maintenance $6.1K EVSE Infrastructure GAS $2.50/gallon (no increase) $120K Maintenance $303.6 $ % fuel efficiency improvement $200 6 MPG to 30+ MPGe $150 $133.8 Class 4, 5, 6 E-100 all-electric and E-GEN range-extended configurations $100 $53.0 And Drivers Prefer Workhorse $50 "The difference in driving the electric truck is it helps with concentration, the ability to hear ambulances and fire trucks more. Makes a big difference. If you're sitting right on top of the diesel engine, you get nothing but that diesel engine. And the exhaust. $0 $ Year *E-Gen Saves Fleets > $165,000 vs. Gasoline Alternative Over 20-Year Life Chicago Tribune, August 2017 (Driver interview from Workhorse customer Alpha Baking).

9 9 N-GEN : Transforming Last Mile Delivery Production Launch Targeted Q Designed to be safest, most efficient last-mile delivery system available Available in Class 4 (450 cu. ft.) and Class 5 (1000 cu ft.) configurations 100 mile all-electric range with optional Horsefly delivery drone UPS announced a landmark order for Workhorse N-GEN 1000 vans in Feb UPS N-GEN 1000 Vehicle Real-world last-mile package delivery pilot program initiated with major Blue Chip customer in March First 15 N-GEN 450 production vans to be delivered in 2018 Patented HorseFly UAV Drone Delivery System lowers package last mile cost by 95% Fully integrated with Workhorse vans, including on-vehicle charging Reduces package delivery cost to ~$0.04 per mile (vs. ~$1.00 for traditional gas vehicle) FAA waiver granted for line-of-sight deliveries HorseFly package delivery pilot program underway in Cincinnati metro area

10 10 USPS Next-Generation Delivery Vehicle 180,000 Vehicle, $6.0B USPS Contract Opportunity One of 5 finalists for USPS Next Generation Delivery Vehicle (NGDV) fleet replacement program Opportunity for $6.0B USPS contract to replace 180,000- vehicle fleet Won prototype contract with body partner VT Hackney Six prototype vehicles delivered to USPS in September 2017; testing underway Award decision expected Q4 2018, production deliveries to begin ~twelve months later All-Electric and Range-Extended Low-Floor Vehicle

11 11 W-15 Range-Extended Electric Pickup Truck 5,500 Pre-Orders Valued at $300 Million Under LOI Exceptional Work Truck Performance Unlimited range with 80 miles all-electric on a single charge Zero to sixty in 5 seconds 2,200 lbs. payload, 4,000 lbs. towing Exportable power for on-site tool and equipment operation Extra large front crumple zone Lane departure correction Rear crash avoidance First-in-Class Commercial Electric Pickup Lowest Total Cost-of-Ownership & Emissions Profile $46K vs. $80K over 10-year life 75 MPGe; ~13T CO2 offset per year State of the Art Safety & Driver Experience

12 12 SureFly TM Hybrid-Electric Multi-copter Transforming Personal Flight Personal Helicopter/eVTOL with applications in precision agriculture, emergency responders, commuters, military Leverages WKHS battery pack, mgmt. systems and controls Gas engine generates electricity, parallel battery pack provides backup power 70 mile range, payloads up to 400 lbs. Future models will have autonomous flight capability Target price under $200K Dec Announced intention to spin off SureFly First successful flight May 2018 FAA Type Certification process entered June 2018

13 13 Blue Chip Customers For Existing and Emerging Workhorse Vehicle Portfolio Letters of Intent to Purchase Vehicles Deployed On Route September 2017 VT Hackney and Workhorse delivered six prototype vehicles in compliance with the United States Postal Service (USPS) Next-Generation Delivery Vehicle (NGDV) contract. June 2018 Pilot testing underway

14 14 World Class Partners Tier-One Suppliers, Development and Commercial Infrastructure, Utility, Vehicle Service Partners Electric-Vehicle Proven Lithium Ion Battery Technology Commercial Supply Agreement Pioneer in Electric Propulsion Systems Commercial Supply Agreement Service, Maintenance & Fleet Management Exclusive Service & Maintenance Agreement Premier Automotive Engineering Solutions Strategic Supplier Partnership Commercially Proven Range Extender (REx for i3 & i8) Exclusive Supply Agreement Largest U.S. Electric Public Power Holding Company Charging Infrastructure Partner

15 15 World Class Manufacturing 60,000 Vehicles/ Year, 265K Ft. 2 Manufacturing Capacity Today with Scalability to 100K+/ Year Loveland, Ohio Corporate HQ & Battery Pack Assembly Facility Union City, Indiana Vehicle Assembly Facility Business Functions Expected Overall Growth Assembly Operations Current capacity for 60,000+ chassis per year Three buildings on approx. Historical capacity up to ~265,000 feet chassis per day in single shift Formerly Navistar Int l Workhorse Custom Chassis Business HQ Projecting to employ as many as 1,500-2,000 employees

16 16 U.S. Commercial EV Competitive Landscape Incumbent OEMs Focused on Electric Passenger Cars and Heavy Duty Commercial Vehicles EV Conversions (Non-OEM) Commercial Electric Vehicle Portfolio P P Class 8 X X P Class 5 P Durability Heavy duty, long lifecycle components TBD Conventional-fueled vehicles command higher maintenance costs Conventional-fueled vehicles command higher maintenance costs Less than one year of real-world US fleet deployment experience Variable quality due to lack of tier-1 suppliers, batch manufacturing Design Ground-up purpose built design, Class 2, 3, 4, 5, 6 All-electric groundup design Lacks innovation; No EV option or re-gen breaking Lacks innovation; no EV commercial truck option All-electric ground-up design (China) Requires chassis purchase from other OEM Environmental Impact Zero emission allelectric Low-emission range extender Zero emission allelectric Conventional-fueled vehicles have a larger carbon footprint Conventional-fueled vehicles have a larger carbon footprint Zero emission allelectric Zero emission allelectric Cost Efficiency Lower fuel & maintenance Positive ROI in <3 years No incentives required TBD 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 costof-ownership Higher initial investment and more expensive total costof-ownership Integrated Drone HorseFly UAV delivery system (Workhorse Electric Vans) N/A N/A N/A N/A N/A

17 Milestones and Roadmap HorseFly IP issued by USPTO SureFly First flight SureFly Initiates FAA Type Certification Process HorseFly Next generation N-GEN integration SureFly Expanded flight SureFly Spin out completed January 2018 June 2018 N-GEN (450) Begins realworld last mile package delivery pilot program in San Francisco Bay Area N-GEN (1000) UPS places 1000-vehicle order HorseFly Begins realworld consumer package delivery pilot program USPS NGDV prototype testing completed N-GEN Production rollout USPS Grant award announced W-15 Initial production prototype pilot program with pre-order fleets

18 18 Diverse Industry Experience & Expertise 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. Paul Gaitan, CFO Mr. Gaitan is a finance executive with over 30 years of experience working for manufacturing companies in the automotive, building products and consumer products space. Paul has led business integrations, developed strategy, and implemented advanced product costing approaches. He has held roles such as Production Manager, Controller, VP of Finance and CFO driving change by addressing both systems and personnel. He earned a bachelor of science degree in finance from the University of Southern California and an MBA from the Stanford Graduate School of Business. Julio Rodriguez, CIO 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 R&D Prior to joining Workhorse, 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.

19 Financial Metrics & KPI s Financial Highlights Total 2017 revenue increased 69% year-over-year Current backlog of over $55 million Projecting gross material margin positivity in 2018 Key Performance Indicators (KPI s) Delivered a record 121 vehicles in Q Battery pack assembly automation yielding positive results Manufacturing throughput from 1 to 4 vehicles/day Annual Revenue (in millions) Quarterly Units Shipped Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

20 20 Investment Highlights A Leading U.S. Commercial Electric Vehicle OEM Market Leader with Proven Track Record Large Addressable Markets with Significant EV Demand Proven Economic Value Proposition Blue Chip Customer Base and World Class Partners Proprietary Platform Technologies Leveraged Across Vehicle Portfolio Nearly 400 vehicles in operation with more than 3 million miles driven Multiple orders placed by industry leading customers such as UPS Last-mile delivery-as-a-service pilot initiated with major Blue Chip customer Only U.S. OEM all-electric vehicle option in $16B+ delivery/cargo van market First mover in multi-billion electric pickup truck market (~500,000 of 2.8M vehicles sold for commercial use) One of five finalists in USPS Next-Gen Delivery Vehicle (NGDV) program ($6 billion/180,000 vehicles) Positive total cost of ownership at ~3 years without incentives Vehicle acquisition cost near price parity with conventional gas/diesel vehicles 70% savings in fuel expense, ~400% improvement in fuel efficiency Existing and target customers include UPS, FedEx, Duke Energy, AEP, DHL, and many others Tier-one supply chain, service and infrastructure partners include Panasonic, BMW and Ryder Battery, drive train, chassis, software, telematics platform technologies leveraged across all vehicle designs Strong patent portfolio (6 patents granted and 2 additional pending) Recent HorseFly TM patent covers any drone utilization with delivery vehicle Scalable Manufacturing, Growth Capital in Place with Clear Path to Profitability Manufacturing capability of 60K vehicles/year (single shift), scalable to 100K with minimal CapEx N-GEN, W-15 vehicles gross material margin positive from first production vehicle Path to cash flow positivity and profitability well-defined