Workhorse Loses Bid for Next-Gen USPS Vehicles; EV Maker’s Stock Plummets
YOUNGSTOWN, Ohio — Shares of electric-vehicle manufacturer Workforce Group plummeted today after the United States Postal Service announced it would contract with Oshkosh Corp. to build its next generation of postal delivery vehicles.
Cincinnati-based Workhorse was among the finalists for the contract.
The USPS announced it would sign a 10-year contract with Oshkosh, based in Wisconsin to assemble between 50,000 and 165,000 over that period.
Workhorse stock collapsed in the wake of the news. Company shares cratered more than 47% Tuesday to $16.46 per unit. Workhorse has a stake in Lordstown Motors Corp., which could have been contracted to build the vehicle for Workhorse.
Lordstown Motors saw its stock price slip by 13.4% on Tuesday to $19.69 per share.
The contract is the first part of a multi-billion-dollar 10-year effort to replace the Postal Service’s delivery vehicle fleet, one of the world’s largest.
The Postal Service fleet has more than 230,000 vehicles in every class, including both purpose-built and commercial-off-the-shelf vehicles. Approximately 190,000 deliver mail six, and often seven, days a week in every U.S. community. The NGDV, along with other COTS vehicles, will replace and expand the current delivery fleet, which includes many vehicles that have been in service for 30 years.
The first NGDVs are estimated to appear on carrier routes in 2023.
“As the American institution that binds our country together, the U.S. Postal Service can have a bright and modern future if we make investments today that position us for excellence tomorrow,” said Postmaster General and USPS CEO Louis DeJoy. “The NGDV program expands our capacity for handling more package volume and supports our carriers with cleaner and more efficient technologies, more amenities, and greater comfort and security as they deliver every day on behalf of the American people.”
The Postal Service awarded the Oshkosh Defense contract in accordance with competitive procurement policies after extensive testing of prototype vehicles, evaluation of offered production proposals, and discussions of technical specifications with the offers.
The award is an indefinite delivery, indefinite quantity contract, meaning that after an initial dollar commitment, the Postal Service will have the ongoing ability to order more vehicles over a fixed period of time; in this case, 10 years. Oshkosh Defense is evaluating which of its several U.S. manufacturing locations is best suited to potentially increase the production rate of the NGDV.
Copyright 2024 The Business Journal, Youngstown, Ohio.