An American electric truck manufacturer is making an unexpected move into AI infrastructure.
Workhorse Group has signed a $10 million agreement with London-based RHAELM to build a full-scale manufacturing reference unit for TerraPod, its new modular data center platform.
The deal, announced Thursday, marks Workhorse's first major commercial commitment in a business far removed from the electric delivery vans it has spent years developing.
Rather than building data centers on construction sites, Workhorse wants to manufacture their components on an industrial production line, using existing expertise in vehicle engineering, electrical systems and mass production.
Under the agreement, RHAELM will pay Workhorse $10 million in three installments to develop a reference unit at its manufacturing facility in Union City, Indiana.
The companies have also signed a nonbinding letter of intent outlining a potential order for 150 TerraPod systems. They aim to finalize a supply agreement by December 31, although the larger order remains conditional on technical acceptance, additional documentation and internal approvals.
There is no guaranteed 150-unit purchase order yet.
Workhorse's new direction follows its merger with Motiv Electric Trucks in December 2025, which brought Motiv CEO Scott Griffith into the same role at the combined company.
For much of its history, Workhorse concentrated on electric commercial vehicles, including delivery trucks used by logistics fleets.
But the economics of that industry have been difficult. Electric truck manufacturers face expensive production requirements, long procurement cycles and customers sensitive to upfront vehicle prices.
In July, Workhorse began outlining a plan to apply its engineering and manufacturing capabilities to mobile AI infrastructure.
That business is now taking shape through TerraPod.
The concept is to manufacture standardized computing modules that combine the equipment normally installed separately inside a data center.
Each unit is intended to integrate computing hardware, electrical distribution, cooling, networking, control systems and fire suppression.
A completed module could then be transported to a prepared location and installed without constructing an entirely conventional data center building around it.
The approach borrows from industrial manufacturing, where standardized designs allow complex products to be assembled repeatedly with predictable processes.
Workhorse believes the same principles could reduce the time needed to deploy AI computing infrastructure.
The surge in demand for AI computing has exposed problems that cannot be solved by purchasing more GPUs alone.
Data center developers need suitable land, electricity connections, cooling systems and physical infrastructure capable of supporting dense computing equipment.
Construction projects can take years, particularly when large facilities require substantial electrical capacity.
Modular data centers offer an alternative for some deployments.
Manufacturing equipment in factories can allow construction and site preparation to happen simultaneously, potentially shortening installation schedules.
It also creates opportunities to standardize designs and quality control.
But factory-built modules still need electricity, networking and cooling capacity at their destination. They do not eliminate the largest infrastructure constraints facing the AI industry.
Workhorse's initial assignment is therefore deliberately limited.
Its $10 million contract covers a manufacturing reference unit intended to test equipment placement, assembly procedures and maintenance access before the companies invest in commercial production.
The result will help RHAELM and its partners determine whether TerraPod can meet the requirements of their proposed infrastructure projects.
If the reference design is accepted and the companies finalize a supply agreement, RHAELM could place an initial order for 150 systems.
The partnership also contemplates giving Workhorse a right of first refusal on future RHAELM projects in the United States.
Workhorse believes commercial production could begin in late 2027 or early 2028.
Those are plans, not secured production commitments.
The company has not disclosed the potential value of the larger order, the computing capacity of each TerraPod unit or independent evidence that its manufacturing approach can reduce deployment costs.
Still, the agreement offers Workhorse a way into a market attracting enormous capital investment without requiring it to become a chip designer or cloud computing provider.
Its role would be manufacturing the physical infrastructure that houses and supports computing equipment.
For a company historically associated with electric delivery vehicles, that would represent a substantial strategic shift.
The immediate test is whether Workhorse can turn its experience assembling industrial machines into a repeatable data center product.
The $10 million deal funds the first stage. Everything beyond that remains to be demonstrated.
Sources: Workhorse 8-K · Announcement exhibit · Q2 2026 results