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DATE

Thursday, August 13, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chief Communications Officer-John Williams
• Chief Executive Officer-Scott W. Griffith
• Chief Financial Officer-Jody Davis

TAKEAWAYS

• Revenue -- $3.6 million in the second quarter of 2026, compared to $800,000 in the prior year period, driven by the inclusion of full combined operations following the Motiv merger.
• Vehicles Delivered -- 26 units in the second quarter, compared to four units in the same period last year.
• Cost Synergies -- $20 million in annualized run rate expected to be achieved by the end of 2026 as the company eliminates redundant facilities and personnel.
• Net Loss -- $20.2 million for the second quarter, or $1.86 per share, compared to $12.8 million, or $1.38 per share, in the prior year period.
• Pro Forma Revenue -- $6.4 million for the second quarter of 2025, providing a comparison base for the combined entity as if the merger had occurred at the beginning of that period.
• Cash Position -- $9.6 million in cash and cash equivalents as of June 30, 2026, plus $700,000 in restricted cash.
• Debt Drawdowns -- $20 million drawn under the cash flow credit agreement and $18.3 million under the customer order credit agreement during the first half of 2026.
• Available Borrowing -- $1.7 million remaining under current credit facilities as of the filing of the quarterly report on Form 10-Q.
• Operating Loss -- $19.4 million in the second quarter of 2026, reflecting the increased cost base of the combined company versus a loss of $9 million in the prior year.
• SG&A Expenses -- $7.8 million, including higher legal and investor relations costs associated with operating as a combined public company.
• R&D Expenses -- $4.1 million, focused on the bill of materials cost reduction program and early stage engineering for mobile AI data centers.
• Sales Pipeline -- More than doubled since the beginning of 2026, supported by a new enterprise sales team and promotional pricing for the W56 step van.
• Mobile Data Center Market Size -- $41 billion estimated by 2031, representing the target opportunity for the company's new turnkey containerized compute solutions.
• Modular Chassis Production -- Late 2027 projected for the start of production for the new modular chassis platform for the W56.
• Total Medium-Duty Market -- $23 billion annually, representing the addressable segment the company aims to target through expansion into Class 5/6 cab-chassis models.
• Historical Investment -- $800 million invested across the Workhorse and Motiv platforms to establish the current technology and manufacturing foundation.
• Post-Quarter Funding -- $10 million in additional borrowing secured in August 2026 through an amended credit agreement to fund ongoing operations.
• Interest Expense -- $800,000 in the second quarter, down from $3.8 million in the prior year period due to debt restructuring as part of the merger.

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RISKS

• Griffith noted that "broader commercial electric truck adoption will ultimately depend on delivering a clearly superior economic value proposition," acknowledging that the industry is still in the early stages of market adoption.
• Davis reported that the company had "$1.7 million available to borrow under our current credit agreement" as of the quarterly filing, highlighting limited remaining liquidity.

SUMMARY

Workhorse Group Inc. (WKHS -0.82%) is transitioning from a specialized electric vehicle manufacturer to an industrial technology firm serving commercial, government, and infrastructure markets. The company reported the completion of the final stages of its merger integration with Motiv, targeting cost reductions and operational synergies by the end of 2026. Management announced a strategic entry into the mobile AI data center market, intending to leverage existing expertise in power electronics and thermal management to manufacture containerized compute units. The company also introduced a modular chassis program designed to lower production costs and expand its reach into the broader medium-duty truck segment.

• CEO Griffith described the transformation as a move "from a pure-play manufacturer of electric commercial vehicles into a new American industrial technology company built to serve critical commercial, government, defense, and infrastructure markets."
• The company plans to serve as an engineering and manufacturing partner for mobile AI data centers, with Griffith stating the goal is to "serve as a tier 1 supplier to the final mobile data center platform integrator."
• Management expects to produce more fully electrified Class 5/6 chassis over the 5 months following the call than in any previous 5-month period in company history.
• The mobile AI data center strategy targets localized compute needs, with Griffith noting that "localized compute makes AI available in places the centralized model cannot reach."
• CFO Davis indicated that the company has "cleared" the hurdles of proving product functionality and establishing a manufacturing plant, focusing future efforts on financial execution and capital structure.
• The new modular chassis platform will incorporate an "integrated smart power electronics hub" to reduce assembly complexity and weight, with initial prototypes expected in the fourth quarter of 2026.

INDUSTRY GLOSSARY

• BOM: Bill of Materials, the comprehensive list of parts and components required to manufacture a product.
• TCO: Total Cost of Ownership, a financial estimate intended to help buyers determine the direct and indirect costs of a product or system.
• ICE: Internal Combustion Engine, referring to traditional gasoline or diesel-powered vehicles.
• Edge Computing: Decentralized data processing at or near the location where data is generated rather than in a centralized cloud-based data center.
• Step Van: A walk-in delivery truck designed for frequent stops and easy driver access to the cargo area.
• Cab Chassis: A vehicle type consisting of a truck cab and a frame, allowing bodybuilders to install customized equipment such as box trucks or service bodies.
• ADAS: Advanced Driver Assistance Systems, electronic technologies that assist drivers in driving and parking functions.

Full Conference Call Transcript

Operator: Good afternoon. And thank you for joining today's call. Welcome to Workhorse Group Q2 26 Earnings Call. Currently, all participants are in listen only mode. A Q&A session will follow the formal presentation. Please be advised that today's conference is being recorded. I will now turn the call over to John Williams, chief communications officer. Mister Williams? Please go ahead.

John Williams: Thank you, operator, and good afternoon, everyone. I would like to welcome all of you to Workhorse's second quarter 26 earnings call. Please note that we have posted our results for the second quarter ended June 30, 26 via press release and 8 and filed our associated quarterly report on Form 10 Q with the SEC. You can find the release and an accompanying presentation in the Investor Relations section of our website. We will be tracking along with the presentation during this call. Before we get to the quarter, 1 framing point.

While Workhorse and Motiv came together in December 2025, what came out of the merger is, in practice, a different company than the 1 that many of you have followed for years. A new management team, new operating platform, and a new strategy. We look forward to sharing more about the new Workhorse today as well as reporting on our progress each quarter. Joining me on today's call are Scott W. Griffith, our Chief Executive Officer; Jody Davis, our Chief Financial Officer, who joined Workhorse in July. For today's agenda, please turn to Slide 3.

Following my opening remarks, I will hand it over to Scott who will provide an update on our operational and commercial progress and the strategic priorities we are focused on. Including our recently announced planned entry into the mobile AI data center category. Jody will then walk us through our financial results for the quarter and our capital position. Scott will then make closing remarks before we open the call for questions. Our cautionary language can be found on Slide 4. The comments that will be made today include forward looking statements which are based on current expectations and projections about future events.

These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Additional information regarding these risks and uncertainties can be found in today's press release and in our filings with the SEC. Including our Form 10 ks and Form 10 Q. Now I will turn it over to Scott.

Scott W. Griffith: Thanks, John. Good afternoon, everyone, and thank you for joining us. As we complete the final stages of merger integration, Workhorse is transforming from a pure play manufacturer of electric commercial vehicles into a new American industrial technology company built to serve critical commercial, government, defense, and infrastructure markets. At the heart of this transformation is our foundational expertise in the design, engineering, testing, validation, and manufacturing of industrial products. While traditionally this expertise has been applied to the commercial vehicle market, we believe we are positioned to leverage it for broader industrial applications. Opening up access to additional large high growth markets.

We continue to innovate and deliver leading software defined medium duty commercial electric trucks that outperform incumbents on total cost of ownership. However, we are still in the early stages of market adoption. And broader commercial electric truck adoption will ultimately depend on delivering a clearly superior economic value proposition. That is the key to capture a meaningful share of the $23 billion annual medium duty truck market and realize our full potential. In a few minutes, I will provide you with an update and details about our overall progress to reduce costs broaden our product portfolio, and build the backlog into 2027.

In July, we announced an important step in advancing our new industrial technology vision, with our planned entry into the emerging mobile data center market. We announced plans to develop a turnkey compute ready, containerized mobile AI data center designed to meet the localized mobile AI infrastructure needs of distributed deployment applications worldwide. This new market is still in its early stages, and we believe our engineering and manufacturing expertise position us well to compete as it develops. I will provide more detail on this development during our call today. All of our products are designed, engineered, tested, and validated by our technology development team and will be manufactured at the Workhorse Manufacturing Center in Union City, Indiana.

We believe our ability to compete and win in these markets will be driven by the complementary capabilities brought together by the Workhorse-Motiv merger our software, hardware, engineering, and product design capabilities, our commercial scale facility and its lean manufacturing processes, our established customer based comprised of many blue chip companies, the technology and manufacturing foundation built on approximately $800 million of historical investment across Workhorse and Motiv, and an experienced management team with strategic vision, agility, and a track record of execution. I could not be more excited by where we stand at Workhorse today. Let me explain why. First, we continue to deliver on our stated integration plan.

We have continued the process of integrating various enterprise technology systems and reducing redundancies across facilities and personnel. This is a complex process, I am pleased with the progress we have made Based on our progress, we continue to believe we are on track to achieve our previously communicated $20 million of annualized cost synergy run rate by the end of 26. Jody will walk you through the numbers in more detail, but I will note that our operating expenses declined sequentially in the quarter even as production increased.

We believe this trend is consistent with the operating leverage we expected to realize as we continue the integration. it is also important to recognize these integration efforts extend beyond cost reduction. These efforts are also about optimizing the organization for growth. By reducing redundancies across our teams, integrating various facilities into a smaller footprint, standardizing our enterprise planning, and reporting tools around a clear set of priorities and having the workforce team focused on the highest and best uses of their time we believe we set ourselves up to win in both the commercial trucking space and the mobile data center space. Second, we are making continued progress on our bill of materials or BOM cost reduction program.

As well as our next generation commercial vehicle platform. Together, we believe these efforts will enable us to not only capture greater market share in our existing step band business, but also unlock a substantially larger slice of the $23 billion medium duty truck market. First, let's talk about how our engineering and design teams are working to take cost out of the platform itself. Supply chain. We have begun discussions with new suppliers for key components that we expect will reduce the cost of our vehicles. And we are working with our existing suppliers to identify opportunities to reduce costs as well. Design and systems architecture.

We are consolidating various systems, including thermal management and power electronics into comprehensive all in 1 systems. For example, we are consolidating previously distributed high voltage modules into a new smart power electronics hub aptly named Smart Hub. Reducing cost, weight, and assembly complexity while also enabling us to utilize a single design across multiple truck classes. We believe these efforts, alongside several others, are expected to result in a substantial reduction in the overall BOM costs. This work matters because we believe the tipping point for fleet electrification arrives when the purchase price of an electric truck is more closely comparable with its ICE equivalent.

And the total cost of ownership case, which we have already demonstrated as superior to ICE, does the rest. We believe these efforts will result in substantial reduction in the overall BOM costs. Which we believe will be important in driving broader adoption as China's recent history in commercial electric trucks shows. In China, a few years ago, as prices for commercial electric trucks trended toward parity with internal combustion trucks, EV sales volumes grew from less than 5% of units sold to greater than 50% of new truck sales in a few short years.

We believe The US truck market is poised to reach a similar break point in our BOM cost down strategy and accompanying price strategy can be a catalyst to bend the EV truck adoption curve similar to the adoption spike in China that began a few years ago. While we are working diligently to reduce BOM cost to compete with ICE vehicles in the step van category, our announced modular chassis and cab chassis efforts position us to move beyond the step band segment and into a wider range of Class 5/6 truck types. Including box trucks, enabling Workhorse to compete in a much larger percentage of the $23 billion medium duty truck market.

We are also making exciting progress on our product development initiatives. Our first 2 programs are focused on the development of the next generation chassis and powertrain platform as well as the launch of our first Class 5/6 cab chassis vehicle. Our new chassis is being designed around a scalable shared modular architecture that will fundamentally transform how our commercial electric trucks are engineered manufactured, and deployed. The chassis will build upon proven foundation and operational learnings of the Motiv Gen6 and Workhorse W56 platforms and be guided by our strategic cost reduction engineering process.

This next generation architecture will incorporate highly flexible wheelbase configurations advanced battery and axle technologies, next generation software capabilities, and an integrated smart power electronics hub. We will also be introducing a new braking system that will be compatible with the latest ADAS features and prepare us for an autonomous vehicle future. Our new modular chassis will be integrated with our step band products and we will also be pairing it with a technically advanced low cost Class 5/6 cab to create a lightweight high performance cab chassis platform optimized for efficient upfitting by bodybuilders.

We believe our entry into the cab chassis segment will allow Workhorse to compete for a much larger percentage of the $23 billion medium duty truck market. The resulting products are expected to deliver increased payload capacity accelerated time to market for vocational applications, and perhaps most important, a more competitive price point compared to gas and diesel alternatives for fleet customers across a wide range of use cases. We are expecting to build initial development prototypes of the modular chassis for the W56 in Q4 26 enabling testing and validation activities to begin shortly thereafter for a planned start of production for the new chassis platform in late 27. Third, we are optimizing for a rapid production ramp.

Through year end and into 2027. We continue to build efficiencies across our supply chain and manufacturing processes in preparation for significantly higher volumes in the third and fourth quarters. To put that in perspective, to fulfill existing firm orders in our backlog, we expect to produce more fully electrified Class 5 and 6 chassis and trucks over the next 5 months than in any prior 5 month period in the company's history. While we are not yet providing specific revenue guidance we expect over the next few quarters to deliver a substantial share of the previously announced orders placed by Purolator and Gateway.

This kicks off what we believe will be a growing momentum in truck deliveries into 2027 something we will elaborate on in future calls. You may be wondering what is happening behind the scenes, to build our order book and what gives me the confidence to anticipate an increase in our bookings and deliveries. Among other things, we are experiencing strong benefits from our refresh sales approach. Including a new enterprise sales team We are seeing increased demand for deliveries in late 26 and 2027 from both existing and new customers.

This new sales approach which leverages the strong TCO and on road performance of our W56 step band product line combined with our 2026 promotional pricing, is continuing to drive product enthusiasm and market interest which is turning into a growing backlog of firm orders, and a sales pipeline that has more than doubled since the start of 2026. We believe the combination of our new pricing the BOM cost down efforts and changes in our sales organization, are contributing to increased interest among electric fleet customers while positioning us well to continue to build momentum as we progress through the 2 remaining quarters of this year and into 2027. Fourth, in July, we added a new chief financial officer.

Jody Davis. he is an excellent addition to our senior leadership group Jody brings many years of financial leadership across manufacturing, energy storage, aerospace, technology companies. With a track record of closing large capital rounds and guiding development stage businesses into full production. He has built the finance infrastructure that capital intensive companies need as they move from development into commercial scale which is precisely where Workhorse is in this journey. We are glad to have Jody on the team and you will be hearing more from him directly. I also wanna thank our former CFO, Robert Ginnan, for his years of leadership and tireless work.

Including his efforts to finalize and close the Workhorse and Motiv merger, and to lead key aspects of our integration, We all wish Bob and his family well, in his retirement. Fifth, we recently announced our intent to enter the mobile data center category with a turnkey compute ready mobile AI data center designed for the localized infrastructure needs of distributed AI deployments. We believe this is a substantial long term growth opportunity for Workhorse for 3 key reasons. it is projected to be a high growth market that is still in the early stages of development. Secondly, we have a head start.

We believe the capabilities we have built and assets we already own provide us with important competitive advantages. And third, our go to market strategy is designed to reduce execution risk. We intend to serve as an engineering and manufacturing partner to our strategic partners who are experts in high speed computing, AI software, and applications Under this model, our partners would lead all end market development, sales, support with the ultimate end customer. Let's go a little deeper into this new strategy for Workhorse. Starting with the market. Third party research estimates the mobile data center market could reach $41 billion by 2031. This growth is being driven by demand for what is called edge or mobile computing.

Simply put, we are seeing a new growth driver in AI infrastructure, the need for highly capable AI operations in close proximity to where the data, power, and mission are located. Here are a few reasons why. First, speed to deployment. By their very nature, mobile data centers can be deployed more quickly than traditional data centers, First, because of their size, they can be manufactured and deployed in the field, in significantly less time than it takes to build a large centralized data center. Second, they can be colocated directly at energy sources like solar, wind, nuclear, and natural gas thus avoiding the long waits for interconnection to the existing electric grid you have likely read about.

Mission critical connectivity. Remote exploration for natural resources, rural agriculture, military, and disaster response operation, ships at sea, and even parts of the developing world do not have reliable high bandwidth connections, to a distant data center. Localized compute makes AI available in places the centralized model cannot reach. And keeps critical systems running even when the network connection drops entirely. Ironclad data privacy, healthcare data, financial transactions, biometric information, military applications, and proprietary industrial data increasingly come with regulatory requirements that restrict where the data can travel, and be stored.

Processing sensitive data at the edge close to its source helps organizations keep raw data in region or on prem while still benefiting from AI, rather than routing everything through a centralized facility that may sit in another jurisdiction entirely. The industries where this kind of computing is most valuable include energy and utilities, defense and government, telecommunications, agriculture, and transportation, among many others. Given the nature of edge computing, the systems being built to serve this market must be mobile secure, and durable. Workhorse has extensive experience designing, engineering, testing, validating, and manufacturing vehicles with these exact attributes. And we believe these capabilities are readily transferable to our new product line. Let's take a closer look.

We believe our engineering capabilities in power electronics, thermal management, ruggedized structures, mobile connectivity, vibration isolation, controls, and systems integration are well suited to the development, of deployable AI infrastructure capable of operating reliably and demanding field environments. Our approach is to combine those core workhorse capabilities with proven commercial technologies and engineer them into a fully integrated purpose built system. Where additional or specialized expertise is required, we intend to work with experienced development partners and technology suppliers to accelerate development. Importantly, we see Workhorse's role extending well beyond simply packaging these components into a containerized structure. We intend to own the overall system architecture integration controls, validation, and product evolution.

Translating customer mission requirements into a rugged scalable platform that can support multiple configurations and future applications. Our Union City facility is well suited for this type of high mix, low volume manufacturing. Where close interaction between engineering and production enables rapid design iteration, prototype builds, validation, and continuous product improvement. We believe this combination of internal engineering capability specialized development partners, proven technologies, and flexible manufacturing can allow us to move from customer requirements to deployable products at the pace this emerging market demands. Our go to market approach will be partnership based. Under this model, Workhorse serves as the design engineering, and manufacturing partner. While our customers lead market development and manage the end customer relationship.

We believe this partnership approach will work because it pairs 2 companies doing what each does best. Our customers will know the end user, the workload, and the deployment environment. Workhorse knows how to design, test, validate, and manufacture ruggedized mobile platforms at commercial scale. Think of us as a tier 1 supplier to the final mobile data center platform integrator. We will leverage the demand generation customer relationships, and market development activity of our clients, rather than requiring us to build a sales and market development organization from scratch.

We believe this approach will offer us a capital efficient path to commercialization and keeps our team focused on existing sources of operating leverage like our engineering and development capabilities and our plant in Union City. We are targeting 2027 for the commencement of production, and commercial deliveries and we expect to provide updates on development milestones and the production ramp in the quarters ahead. Financially, the strategic logic is straightforward. We believe this product line can provide new, potentially significant sources of revenue and cash flow increase the utilization of operating leverage of our existing manufacturing, test, and validation assets, and help fund continued progress on vehicle cost reduction and new model development.

With that, let me hand it over to Jody for the Q2 financials.

Jody Davis: Thanks, Scott. Good afternoon, everyone. This is my first earnings call as Workhorse's chief financial officer. So let me briefly share why I joined. Workhorse has a combination that is still rare in the vehicle electrification. A product that already delivers strong operator economics, a manufacturing facility that is built and running, and a blue chip customer base of the largest medium duty fleets in North America. Bringing an electric commercial vehicle to usually means years spent proving the product works while simultaneously trying to fund the plant to build it. We have cleared both of those hurdles. A critical part of the work ahead is financial execution.

Putting the right capital structure in place, while managing costs with discipline and building the systems and reporting this company needs to operate at scale. That is the work I know how to do, and that is why I joined Workhorse. I am only a few weeks into the role, but it is what is ahead of us that truly excites me. And I am highly confident in our strategy and the path in front of us. Before walking through the numbers, I want to provide some context on comparability. Our consolidated results for the second quarter of 26 reflect the fully combined Workhorse and Motiv operation.

Comparative information for the second quarter of 25 reflects only Motiv, the accounting acquirer, and the reverse merger. As a result, certain year over year comparisons are not on a like for like basis. Where helpful, I will reference the unaudited pro forma combined figures included in today's press release so you have the right reference point. Revenue for the second quarter of 26 was $3.6 million compared to $800 thousand in the second quarter of 25 on a GAAP basis. We delivered 26 vehicles in the quarter compared to 4 vehicles in the prior year period. On a pro forma combined basis, revenue for the prior year quarter was $6.4 million reflecting delivery of 39 vehicles.

For the first half of 26, revenue was $7.9 million roughly in line with the pro forma combined revenue of $8.2 million in the first half of 25. Cost of sales for the second quarter was $11 million resulting in a gross loss of $7.5 million consistent with the first quarter. We continue to expect gross margin to improve as we scale production volumes at Union City and realize the cost benefits of the combined platform. Selling, general, and administrative expenses were $7.8 million in the second quarter compared to $4.5 million in the prior year period.

With the increase driven by the inclusion of the full combined company cost base in 2026. for accounting, As a publicly traded company, we now have higher cost legal, investor relations, and other costs that Motiv did not incur as a privately held company. While costs are higher than last year, we are realizing synergies from the redundant headcount and other operating costs. As we remain on track to exit 2026 at our previously communicated $20 million in annualized cost synergy run rate. Research and development expenses were $4.1 million in the second quarter compared to $3.2 million in the prior year period.

The increase reflects continued strategic investment in our initiative to lower the total bill of materials cost on our vehicles toward ICE comparable levels. Loss from operations was $19.4 million in second quarter compared to $9 million in the prior year period. Interest expense net was $800 thousand compared to $3.8 million in the prior year period. The lower interest expense is due to re restructuring our debt as part of the merger, which resulted in lower debt levels in the current quarter at lower interest rates than the prior year.

Net loss for the quarter was $20.2 million or $1.86 per basic and diluted share, compared to a net loss of $12.8 million or $1.38 per share in the prior year period. Turning to the balance sheet. As June 30, we had $9.6 million in cash and cash equivalents, plus $700 thousand in restricted cash. During the first half, we drew $20 million under our cash flow credit agreement, bringing outstanding balance to $30 million and $18.3 million under our customer order credit agreement. After quarter end in August, we amended our cash flow credit agreement to increase its capacity and borrow an additional $10 million to fund our operations.

As of the filing of our 10 Q, we had $1.7 million available to borrow under our current credit agreement. We are not providing specific financial guidance at this time, but with that said, we expect deliveries to increase meaningfully in the second half of 26 as we ramp production at Union City. That ramp supports our previously announced orders of 100 vehicles each from Purolator and Gateway as well as purchase orders from other customers. We continue to work to convert our pipeline of orders and revenue in the second half of 26. With that, let me turn it back to Scott for closing remarks.

Scott W. Griffith: Thanks, Jody. In summary, Workhorse has made tremendous strides in our plan to establish the leading position the medium duty commercial trucking segment. Our integration efforts are succeeding in reducing costs and optimizing the company for growth. Our engineering and design teams are finding ways to reduce costs today while unlocking future growth through low cost and more flexible platforms that can also expand our addressable target market in the commercial truck segment. We are developing an exciting new line of business in the mobile data center category where we can leverage current capabilities and assets to offer a compelling value proposition to a high growth market.

And we strengthen the executive team set clear goals, and structured the overall organization to deliver our promises to customers and most importantly, to our shareholders. I am looking forward to a strong finish to 2026 and an even stronger 2027. We appreciate your continued support and we look forward to updating you on our progress in the months ahead. Operator, you may now open the lines for questions.

Operator: Thank you. We will now be conducting a Q&A session. We ask that you limit we ask that you please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press 1 on your telephone keypad. You may press 2 if you would like to remove your question from the queue. Before pressing the star keys. 1 moment, please, while we poll for questions. Our first question is from Benjamin Sommers with BTIG. Please proceed with your question.

Ben Summers: Hey, good afternoon, guys, and thank you for taking my questions, and welcome to the team, Jody. So first, wanted to ask on the pivot to, you know, the AI data centers. And if you could just talk a little bit more about the steps you need to get to commercialization by 2027 and just you know, any preliminary feedback you guys have kinda had since the announcement, you know, a little while ago? Thank you.

Scott W. Griffith: Hey, Ben. Nice to hear from you. it is Scott, and I will I will ask Jody to tap in here. I think the key steps right now are know, what I would call a phase zero, developing the platform itself. And finishing the initial design. What we are targeting Ben is something that is I do not I would not say it is universal, but something that is will fit a number of different applications. We have some initial thinking on that. We are out pulling the market right now.

So finishing that and then getting into prototyping and being prepared for manufacturing, those steps you know, probably take in the next 10 to 12 months for us to finish. So those are all internal based on market feedback we have had so far. We are also developing an expanded list of supply chain partners who are going to be suppliers to that business as well. that is well underway now. there is some hiring, although a lot of crossover right now as we noted in the comments earlier. The most of the hiring will come as we really dive into specific customer applications that we build.

What we are trying to do is build a much like our chassis, think of it as sort of a modular containerized system that can be compatible with different applications I would say the other most important part is developing these key, you know, sort of front-end partnerships. We use the term tier 1 supplier to these key partners. They are the folks that will be, you know, globally around the world looking for applications customers, and specific needs that are combined, our combined offering will come together.

We will supply the containerized system They will put all the compute software any of the communications systems that are associated with those in any of the in country or in region areas that are outside jurisdictions we typically deal with, that will all be our partners. So and those conversations are well underway. Frankly, that was a big part of our due diligence on whether to even enter this market. This was not a market we entered lightly by any means. it is 1 we did a lot of research in We talked about a $40+ billion market out in a few years.

And we really did quite a bit of research and digging in to where we think we could really apply applications to do that. So those are sort of the initial things developing that platform that is modular much like our chassis. And developing these initial partnership relationships that are gonna be market development. Partners for us. We are well on our way in on both of those fronts now. I do not know, Jody, if you wanna add to that.

Jody Davis: Yeah. The only thing I would add to that is really our factory footprint and really leveraging the fact in Union City. You know, we have a lot of the talent in house already that we can we can utilize. And so, you know, I feel it you know, our capabilities internally are really well suited to be able to capture early adoption and development over the next year, year and a half.

Ben Summers: Super helpful. Then for my follow-up, know, just want to ask a bit more on the supplier discussions that you guys spoke about and reducing cost You know, how much of this is under your guys' control versus how much of it is just market driven and just you know, relying on cost components just coming down. Just curious how much control you guys have over reducing you know, the cost of goods sold here.

Scott W. Griffith: You are specifically referring to the BOM cost on the vehicle?

Ben Summers: Exactly. Yep.

Jody Davis: Yeah. Good question. And so, yeah, we have a cost down strategy, and not it is not just working with the current suppliers. it is really, you know, rethinking how we think about the overall BOM cost. And so with that strategy, we are looking at, you know, new potential suppliers as well. That really can help drive our cost down from where we are today. And really drive a positive gross margin. So we are we are working with those partners, and we are looking for new partners. And, you know, we really think that this is a 12 to 18 month time frame for us.

And so that way, we can, you know, have our pathway to get free cash flow positive and really drive, you know, financial discipline within our within our within our within the company.

Scott W. Griffith: Yeah. The thing I would add, Benson, it is Scott. I think in addition to Jody's comments, definitely looking at new suppliers in addition to current suppliers, And also looking at some of the, you know, the most high value components that we have used historically, things like batteries, e axles, and braking systems, steering systems, all those really high value components Can we codevelop together with some of our really key suppliers The--this supply chain is really global now. And, frankly, a lot of the best suppliers are coming from outside the US, even Canada, Europe, obviously, China is a part of that now. So we are really scouring globally.

And expanding the reach of what our supply chain experts are looking for. And we are talking directly to some of those highest value suppliers, you know, what is in their product pipeline that we need to incorporate And it is 1 of the benefits of that modular chassis approach we talked about. We wanna be able to swap in new components as they come along. From our suppliers. So we are working with them directly to understand what is their 3 or 4 year road map too. And how do we build that into our engineering structure as we as we expand. So when we say, you know, our BOM cost down program, that is a multiyear ongoing effort.

I we will never finish that, Ben. So that is that is really how we are thinking about it And it is exciting to see what is happening particularly as passenger cars expand globally the commercialization of larger components for commercial trucks have also started to catch up now. To some of those technologies. Things like 800 volt systems that historically were more 400 volt systems that are everyone seems to be converting to. So it is it is following their sort of technology advancement curve. And incorporating that into our designs as they incorporate too.

Ben Summers: Super helpful. Thank you guys for taking my questions.

Operator: We have reached the end of the Q&A session. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.