Ben Sommers

Ben Sommers from BTIG inquired about the broader market outlook for state-level incentives for the W56 step van across the U.S., specifically opportunities beyond California. He also asked about the expected cost trends for the W56 vehicle as production ramps up in 2026.

Answer

Workhorse Group CEO Rick Dauch highlighted the success of HVIP vouchers in California, leading to immediate order increases from FedEx Ground, and noted growing interest in Washington and New York. He emphasized the W56's proven reliability (97-98% uptime) driving repeat orders and a significant 55-65% total cost of operation reduction for fleets. CFO Bob Ginnan explained that cost reductions for the W56 in 2026 would come from lower bill of material costs through engineering and supply chain efficiencies, and improved labor costs with increased production volume. Rick Dauch added that de-escalators in purchase contracts and higher battery volumes are key to achieving cost parity with internal combustion engine vehicles over time.

Ben Sommers from BTIG inquired about the broader market outlook for state-level incentives across the U.S. for the W56 step van, specifically asking about opportunities beyond California's HVIP vouchers. He also asked about the expected cost trends for the W56 vehicle as Workhorse ramps up production towards its 2026 launch.

Answer

CEO Rick Dauch highlighted the success of HVIP vouchers in California, leading to immediate order pickups and repeat business from FedEx Ground operators, with W56 vans achieving 97-98% uptime. He also noted growing interest and voucher movement in Washington and New York. CFO Bob Ginnan explained that cost reductions for the W56 in 2026 would come from decreasing bill of material costs through engineering and supply chain efforts, alongside improved labor costs as production volume increases. Rick Dauch added that de-escalators are built into purchase contracts for higher volumes and emphasized the 55-65% total cost of operation reduction for W56 in the field.

Ben Sommers asked about the demand profile for the smaller Illinois site in Hut 8's pipeline and the potential for expansion in that region.

Answer

CEO Asher Genoot explained that the Illinois site was developed as a tuck-in add-on for tier-one markets, seeing demand for tuck-in sites, burst capacity for AI labs, and enterprise use. It also presents an opportunity for HiRise and GPUs. Genoot stated that Hut 8 is currently prioritizing larger campuses due to demand but views the Illinois site as strategically valuable for specific placements rather than just economics, despite its smaller scale.

Ben Sommers inquired about the demand profile for Hut 8's Illinois site, given its smaller size compared to other pipeline sites, and potential expansion in that region.

Answer

CEO Asher Genoot described the Illinois site as a 'tuck-in add-on' for tier-one markets, attracting demand for nearby operations, burst capacity for AI labs/enterprise, and opportunities for Hirise (GPUs). He noted that while larger campuses are currently prioritized, the Illinois site is valuable for strategic placement rather than just economics.