US Postal Service Awarded Tuesday Oshkosh (NYSE: OSK) an initial $ 482 million to modernize its fleet of postal delivery vehicles, a big win for Oshkosh who sent shares of the electric truck maker Groupe Workhorse (NASDAQ: WKHS) plunging.
In a statement, the Post announced a 10-year contract with Oshkosh Defense for the Next Generation Delivery Vehicle (NGDV). The initial contract will allow Oshkosh to finalize the production design of the vehicle, with a plan to assemble 50,000 to 165,000 over the next 10 years.
Vehicles will be equipped with either fuel-efficient internal combustion engines or battery-powered electric powertrains that can be upgraded as technologies evolve.
The first of the new vehicles is expected to hit the road by 2023. Overall, the contract is expected to be worth more than $ 6 billion. Postmaster General Louis DeJoy said in a statement:
As the American institution that unites our country, the United States Postal Service can have a bright and modern future if we make investments today that position us for the excellence of tomorrow. … The NGDV program expands our ability to process more volume of packages and supports our carriers with cleaner and more efficient technologies, more amenities, as well as greater comfort and safety as they deliver every day. on behalf of the American people.
The announcement is a blow to Workhorse, an electric vehicle startup that investors hoped could use the USPS contract to jumpstart its business. Workhorse has other business to fall back on, including an order for 6,000 electric delivery vans received in January, but the hoped-for jump from a project of 1,800 vehicles built in 2021 to a full-scale manufacturing contract with the Post is apparently no longer an option.
Oshkosh shares were up 9% before the close on Tuesday, while Workhorse shares were down 42%.