Workhorse Group Inc. Investor Presentation

Workhorse Group Inc. Investor Presentation

Workhorse Group Inc. Investor Presentation August 2016 © 201 Workhorse Group Inc. All Rights Reserved. © 2016 Workhorse Group Inc. All Rights Reserv...

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Workhorse Group Inc. Investor Presentation August 2016

© 201 Workhorse Group Inc. All Rights Reserved.

© 2016 Workhorse Group Inc. All Rights Reserved

INDUSTRY DATA AND 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. This report may contain forward-looking statements that reflect current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. 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.

© 2014 Workhorse Group Inc. All Rights Reserved.

1

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

FOUNDED: 2007

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HEADQUARTERS: CINCINNATI, OHIO EXCHANGE: NASDAQ

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EMPLOYEES

AND

CONTRACTORS: 80

TICKER SYMBOL: WKHS

• Diverse product offering with strong value proposition for its customers

o Workhorse Medium-Duty Step Chassis: E-Gen – Range-Extended Electric Vehicle and E-100 – Full Electric o Metron Telematics: cloud-based, database-driven telematics platform o HorseFly Delivery Drone: proprietary unmanned aerial system designed for the package delivery market and other applications • Current capacity to produce 60,000 units per year o [325,000] square feet of manufacturing capabilities in Cincinnati, Ohio and Union City, Indiana • Proven deployment with premier delivery providers o WKHS provides range-extended electric vehicles for UPS, FedEx and Alpha Baking Company, and is a pre-qualified supplier for USPS • Proprietary technology protected by a significant patent portfolio o Six granted patents, with two additional patents pending • Seasoned management team with expertise in technology companies and the automotive industries © 2014 Workhorse Group Inc. All Rights Reserved.

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ATTRACTIVE ECONOMICS Cost Comparison - Gas vs. Workhorse E-Gen Total Cost-of-Ownership:

$0.11 per kWh $53K Maintenance

$2.50 Go-Forward Price $120K Maintenance

E-GEN Saves Fleets > $140,000 vs. Gas Over 20 Year Life Cycle

© 2014 Workhorse Group Inc. All Rights Reserved.

$141,190 Savings

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OVERVIEW OF WORKHORSE’S PRIMARY PRODUCT LINE Medium-Duty Step Chassis Innovative design and attractive price point positions Workhorse as a top competitor in this market segment.

The Workhorse strip chassis is offered in two battery-powered electric models. E-GEN – Range-Extended Electric Vehicle

• EPA-approved battery-electric vehicle with on-board generator • Revolutionary patent-pending system incorporates a BMW i3 REx solution to add charge to the battery pack when the pack falls below the optimal level of charge • Workhorse E-GEN will deliver the equivalent of 26 mpg and beyond compared to the 6 mpg of conventional fleet operators, significantly reducing operating costs • Utilizes a smaller, less expensive battery pack reducing purchase price when compared to competitors • Eliminates customer concerns over range anxiety • Achieves an industry first positive return on investment in three years without government incentives • Optional: Cloud-based, database-driven telematics monitoring tool that provides fleet operators real-time diagnostics and ultimate route efficiency

Underlying both the E-GEN and the E-100 electric trucks is Workhorse’s innovative battery pack.

© 2014 Workhorse Group Inc. All Rights Reserved.

Featuring world-class Panasonic 18650 cells, the same type of cells used in the Tesla Model S

E-100 - Full Electric

• Patent-pending designs developed by Workhorse • Leverages the electric drivetrain with a mass-produced chassis to deliver a highwaycapable, 100% electric, zero-emission vehicle that delivers approximately 100 miles meeting the range and performance requirements of large commercial fleets • Approved for incentive funding in New York, California, and Chicago • Optional: Cloud-based, database-driven telematics monitoring tool that provides fleet operators real-time diagnostics and ultimate route efficiency

Coupled with Workhorse’s proprietary battery management system, the battery pack can be sized to meet the varying range requirements of fleet customers

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WORKHORSE W88 CHASSIS LAYOUT – E-GEN ILLUSTRATION Workhorse E- GEN patent-pending powertrain is unmatched by any other powertrain supplier.

BMW REx - 647cc; 2-cyl. Internal combustion engine configured as on-board Generator

2100nm Electro Magnet Motor Direct-Drive = No Transmission

Workhorse W88 Straight-rail Chassis

© 2014 Workhorse Group Inc. All Rights Reserved.

Rear axle with integrated parking brake

Panasonic 18650 Li-ion Battery Pack with integrated BMS and HVIL protection and standard J1772 Charger 5

WORKHORSE W88 CHASSIS LAYOUT – E-100 ILLUSTRATION Workhorse E- 100 patent-pending powertrain is unmatched by any other powertrain supplier.

Workhorse W88 Chassis 19,500lb. GVWR

Battery Heat Exchanger

Park Pawl Housing 200 kW / 2100 N-m Electric Motor © 2014 Workhorse Group Inc. All Rights Reserved.

120 kWh Li-Ion Battery Packs with Integral BMS and HVIL Protection 6

WORKHORSE METRON TELEMATICS PERFORMANCE MONITOR Workhorse Developed Metron Telematics

The telematics system and associated hardware installed the Workhorse vehicles are designed to monitor the CAN network traffic for specific signals. These signals are uploaded along with GPS data to a Workhorse server facility where the data signals are tracked at ten (10) second intervals while driving and during the E-GEN electricity generating process and at sixty (60) seconds during a plug-in charge. The real-time data is stored in a database as it arrives and delivers updates to clients connected through the web interface. Clients are given login credentials (username and password) to the telematics website can monitor the performance and location of the vehicles. Group privileges can be configured to limit access to clientspecific vehicles securing the vehicle data so clients can only view their vehicle data. Administrator privileges allow all data for all clients to be monitored and viewed. © 2014 Workhorse Group Inc. All Rights Reserved.

7

OVERVIEW OF WORKHORSE’S UNMANNED AERIAL SYSTEMS HorseFly Delivery Drone

Engineering the future of parcel delivery aviation HorseFly™ Unmanned Aerial System (UAS) is designed for the package delivery market and other commercial applications • Designed to meet the existing and anticipated future FAA guidelines • Differentiated from other UAS’s as it works in tandem with a Workhorse electric truck

• Delivers packages, loaded en-route by the driver, to remote locations while the driver continues on the main delivery route, saving the fleet operator much of the fuel cost of the most expensive miles • HorseFly rejoins the truck at its new location once its delivery is completed • HorseFly recharges from atop the Workhorse truck

• Superior to other delivery UAV’s operating plans, where the package is loaded at the warehouse and must return to the warehouse once the delivery is completed • Partnered with the University of Cincinnati’s Department of Aerospace Engineering and Engineering Mechanics to develop HorseFly © 2014 Workhorse Group Inc. All Rights Reserved.

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OVERVIEW OF WORKHORSE’S UNMANNED AERIAL SYSTEMS (UAS) Workhorse UAS Drone Delivery Process

Select the link below to view the HorseFly Delivery Process in Action

© 2014 Workhorse Group Inc. All Rights Reserved.

9

ELECTRIC VEHICLE INCENTIVES Workhorse’s Full Electric Vehicles are approved for State Government incentive funding

The NYT-VIP is an important partnership between the New York State Energy Research and Development Authority (NYSERDA), New York State Department of Transportation (NYSDOT), New York City Department of Transportation (NYCDOT), and CALSTART. The program offers incentives for truck purchasers operating in 30 counties in the state. The Workhorse E-100 qualifies for a $60,000 voucher that reduces the purchase price to $73,000. Vehicles destined for New York operations are equipped with a cold weather package for maintaining battery performance.

The HVIP is designed to offset much of the cost of eligible hybrid and battery-electric medium and heavy-duty vehicles using a simplified purchase voucher. The Workhorse E-100 qualifies for a base incentive of $90,000 under the HVIP in California. The first three vehicles purchased by a fleet also receive an additional incentive of $10,000 per vehicle

Offers $11,000,000 in incentives to fleets interested in shifting from diesel to zero-emission vehicles. Vouchers are available for fleets operating in the city of Chicago and six surrounding counties. Workhorse E-100 All-Electric Walk In Vans qualify for an incentive of $60,00 and are equipped with a CARB-certified, onboard, fuel-fired heating system and a cold weather package for maintaining battery performance.

Incentives worth $32,800 are also available to customers that wish to purchase the Workhorse E-GEN electric vehicle.

© 2014 Workhorse Group Inc. All Rights Reserved.

10

COMPETITIVE LANDSCAPE Workhorse Powertrain vs. Other Manufacturers Workhorse’s ability to meet fleet performance specifications and reduce vehicle lifecycle costs affords it significant advantages over competitors offerings. Key Features and Innovative Highlights

• Workhorse is currently the only (to the best of our knowledge) battery-electric, medium-duty OEM in the United States and is also the only medium-duty, battery-electric public company. • The EPA-approved E-GEN Workhorse truck configured with an onboard generator provides a unique solution to the medium-duty truck market. This on-board generator is a game-changer for fleet operators interested in reducing the lifecycle costs of their vehicles

Workhorse Powertrain vs. Other Manufacturers Characteristics

Workhorse

Other Manufacturers

Durability

Built with an array of heavier duty components for longer lifecycles

Some offer lighter design and build quality, with shorter lifecycle

Design

Flexible design with choice of two powertrains; E-GEN Emergency Range and E-100 All Electric

No competing product

Environmental Impact

EPA-approved E-GEN emergency range electric medium duty truck

No competing product

Cost Efficiency

Lower fuel and maintenance costs

Lower initial investment but more expensive total cost of ownership, with higher fuel and maintenance costs

• Workhorse trucks are purpose-built for the package and product delivery market. • Workhorse had an outstanding reputation for being inventive and flexible enough to meet the changing needs of its key customers. • Low to zero environmental impact • Workhorse qualifies for financial incentives, such as those offered in New York, California, and Chicago, to lower the purchase price of an EV truck

© 2014 Workhorse Group Inc. All Rights Reserved.

Positive return on investment in four years or less without government incentives

11

MARKET OPPORTUNITY Growth Strategy

Workhorse employs a thoughtful, long-term growth strategy based on market demand and cooperative partnerships with suppliers and innovators. Category

• Step Van and Cab-over Strip Chassis

Total Market Size in Units

• Estimated 12,000-15,000 Step Van units per year • Estimated 100,000 Cab-over units per year

Revenue Streams

• • • •

Competitors

• Ford and Freightliner gasoline and diesel trucks

Markets

• • • • • •

Distribution Channels © 2014 Workhorse Group Inc. All Rights Reserved.

Workhorse strip chassis Battery-powered options Recurring revenue from cloud-based software solutions (Metron Telematics) Intellectual property licensing

Package and product delivery companies Bakeries Uniform and laundry services Food services Utilities Special use industries (newspapers, municipalities, grocery delivery, etc…)

• 440 dealerships nationwide 12

CUSTOMER ORDERS AND PRE-QUALIFIED SUPPLIERS LIST Clients and Prequalified Supplier Lists

Clients

• One hundred twenty-five (125) Workhorse E-GEN’s ordered by UPS on August 7, 2105. • Two (2) Workhorse E-GEN’s acquired under a pilot program have performed very well delivering packages on routes for UPS since April 2015

• Eighteen (18) Workhorse E-100 All-Electric vehicles delivered and on-route to UPS for the Houston-Galveston Area • FedEx Express – (20) Workhorse range-extended vehicles replacing BMW i3 REx with Plug Power Hydrogen Fuel Cell – this is part of the FedEx Express/DOE Hydrogen Fuel Cell Extended-Range Battery Electric Vehicle project, Award Number: DEEE0006522. • Alpha Baking Company  (5) Workhorse E-GEN’s ordered in February 2015

Pre-Qualified Supplier List

• United States Postal Service (USPS)  On April 10, 2015, Workhorse was notified by the USPS of their selection as a pre-qualified supplier for the USPS Next Generation Delivery Vehicle (NGDV) Program  On March 8, 2016, Workhorse presented to the USPS Technical Evaluation Committee and responded to questions regarding the RFP response  NGDV is a $6B vehicle replacement program consisting of more than 180,000 USPS delivery vehicles

© 2014 Workhorse Group Inc. All Rights Reserved.

13

INTELLECTUAL PROPERTY

In addition to several patents, Workhorse received 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. Workhorse Technologies current and pending patents, service marks and trademarks: 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

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.

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.

13/912289 (pending)

High-efficiency drive train utilizing two or more motors to derive unique torque profiles.

US 61/933350 (provisional)

Onboard generator drive system for electric vehicles that share an electric motor for both propulsion and generation.

© 2014 Workhorse Group Inc. All Rights Reserved.

14

SUMMARY

Competitive Advantages

• Proven market leader in manufacturing medium-duty trucks with battery-powered electric drivetrains • Compelling Value Proposition  Workhorse products provide breakthroughs in fuel and maintenance efficiency, and environmental impact  Acquisition of the Workhorse plant and proprietary technological advancements allow Workhorse to enter the truck market for a fraction of the estimated $500m investment to launch a new truck  Electric vehicles are more cost effective than gas and diesel over the long term. Reduces fuel costs by achieving a 400% improvement in fuel efficiency • Scalable  Capacity to produce 60,000 units per year

Sizable Addressable Market

• 6 issued and 2 pending or provisional patents • New York Truck VIP • California HVIP • Drive Clean Chicago

Patents and Achievements

• Addressable attractive margin markets: Significant opportunity for recurring revenue in the $1 billion per year strip chassis market • Game changing technology validated by state energy authorities and lead customers • Strategic partnerships with industry leaders and transportation technology pioneers

© 2014 Workhorse Group Inc. All Rights Reserved.

15

LEADERSHIP

Management Team

Stephen Burns, Founder, CEO & Director

Julio Rodriguez, CFO

Don Wires, Director of Engineering

© 2014 Workhorse Group Inc. All Rights Reserved.

Duane Hughes, President

Marty Rucidlo, Vice President of Manufacturing

Board of Directors

Raymond Chess, Chairman

Gerald Budde, CFO, Assured Neace Lukens

James Taylor, Former CEO, Hummer

H. Benjamin Samuels, Co-President, Victory Packaging

Advisors

Bill Richardson, Former Governor of New Mexico

16

CONTACT INFORMATION For more information, please contact:

Steve Burns

Duane Hughes

Julio Rodriguez

Founder & CEO

President

Chief Financial Officer

Workhorse Group Inc.

Workhorse Group Inc.

Workhorse Group Inc.

100 Commerce Drive Loveland, OH 45140 USA

100 Commerce Drive Loveland, OH 45140 USA

100 Commerce Drive Loveland, OH 45140 USA

Office: 513.360.4704

Office: 513.360.4704 Mobile: 513.322.0052

Office: 513.360.4704 Mobile: 678.428.6558

Email: [email protected]

Email: [email protected]

Email: [email protected]

Website: www.workhorse.com

Website: www.workhorse.com

Website: www.workhorse.com

© 2014 Workhorse Group Inc. All Rights Reserved.