At the time, he urged Congress for funding to make the delivery fleet all-electric. In January, President Biden vowed to replace the Postal Service’s fleet of roughly 650,000 vehicles with electric models. An All-Electric USPS Fleet Still May Not Be Out of the Question Negotiations with the Postal Service went far, and Workhorse even won the support of many lawmakers along the way…including now-President Biden. Prior to Oshkosh winning the contract, Workhorse had proposed building an all-electric fleet for USPS. This said, only 10% of the new Oshkosh vehicles will be all-electric the other 90% will continue to run on gas. With Oshkosh working as the manufacturer, the new vehicles will be a mix of internal combustion-powered and battery-electric. It lays out expectations for delivery of between 50,000 and 165,000 of the vehicles over the course of 10 years. The contract that USPS awarded to Oshkosh could be worth more than $6 billion in total. Now, Workhorse is taking the next steps to file a legal challenge the decision. Upon losing the bid to Oshkosh, Workhorse met with USPS to discuss why they lost the bid. However, this left another company, Workhorse Group, spurned after long rounds of negotiations. USPS delivery vans are in desperate need of updating, and earlier in the year, USPS awarded a multi-billion contract to Oshkosh Defense to manufacture the next generation of delivery vehicles. The company has blamed raw material shortage, supply chain bottlenecks, and limited production capacity as key factors that have been hampering a production ramp-up.The saga of the Postal Service upgrading its fleet of outdated delivery vans continues. So far this year, it has only produced 38. Workhorse is currently planning to build at least 1,000 C-series trucks in 2021. These developments do not add confidence in the ability of Workhorse to deliver on its contractual obligations. Moreover, the truck recently took part in San Felipe 250 racing event but called it quits soon after due to the greater-than-expected energy consumption of the EV. However, Lordstown’s own Endurance electric truck is faltering amid allegations of an inflated order book and the truck catching fire during testing. As an illustration, Workhorse is expected to rely on the manufacturing prowess of Lordstown Motors ( NASDAQ:RIDE) to fulfill its contractual obligations. Readers should note that a sizable element of risk will still prevail over Workhorse even if it manages to win an additional contract for the electrification of the USPS. Today’s development appears to be the logical next step in this ongoing electrification push by US lawmakers.Īs we’ve detailed previously, the probability of Workhorse becoming a key node in the NGDV contract underpinned much of the stock’s gains in 2020, which at one point amounted to over 800 percent! The contract was considered a vital lifeline for Workhorse and was expected to reverse its accelerating cash burn problem. Following a sizable backlash, Postmaster General Louis DeJoy had told members of the House Appropriations Committee’s financial services and general government subcommittee that the USPS would procure additional electric vehicles if the Congress were to furnish more resources. However, to the consternation of many lawmakers, only 10 percent of that contract consisted of electric vehicles. While analysts had expected a part of the contract to go to Workhorse, that expectation did not materialize. Bear in mind that the USPS had awarded a 10-year Next-Generation Delivery Vehicle (NGDV) contract, worth at least $6 billion, to Oshkosh ( NYSE:OSK) back in February.
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