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Workhorse Stock Dives After Losing Massive USPS Fleet Upgrade Deal

Workhorse Group (WKHS) lost the race for a key contract with the U.S. Postal Service to a unit of Oshkosh (OSK), which reportedly partnered with Ford (F) on the bid. Workhorse stock plunged.




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The USPS awarded Oshkosh Defense a deal to deliver 50,000-165,000 battery-electric and low-emission combustion-engine vehicles over 10 years, according to a news release, which described it as the Postal Service’s “first large-scale fleet procurement in three decades.”

The postal agency will pay Oshkosh $482 million for initial engineering and factory buildout ahead of production of the “next-gen” delivery vehicles. The contract to build the next mail trucks is estimated to be worth more than $6 billion.

Production is expected to begin in 2023, the release said.

Investors in Workhorse, a small electric van company out of Ohio, had pinned their hopes on the postal contract. Many saw the contract as a home run that would put Workhorse on the path to profitability.

After several delays tied to which vehicles to replace its aging fleet of trucks for mail delivery, the postal service awarded the 10-year contract to Oshkosh Tuesday. That comes nearly a month after President Biden sought to electrify government fleets.


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Workhorse Stock

Shares cratered 47.5% to close at 16.47 in Tuesday’s stock market trading, undercutting both the 50- and 200-day lines. Oshkosh stock added 0.8% in late trade to a 6.1% gain in the regular session. Ford closed down a fraction.

Lordstown Motors (RIDE), which is partly owned by Workhorse, dived 13.4%.

Last June, Workhorse gained key certification putting its next-gen all-electric vans for last-mile deliveries on the path to commercialization. Workhorse stock soared on the news, with both UPS (UPS) and the USPS seen as key customers.

Find Aparna Narayanan on Twitter at @IBD_Aparna.

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