Shares of electric-delivery van maker Workhorse Group (NASDAQ:WKHS) continued a dismal week Friday, down 13.3% at noon EST.
Investors in Workhorse Group previously drove the stock price up based on hopes the company would win at least a portion of a $6 billion USPS contract to replace its fleet with next-generation delivery vehicles. When the U.S. Postal Service (USPS) announced this week that a 10-year contract would go to a subsidiary of Oshkosh (NYSE:OSH), shares of Workhorse Group immediately tanked 50%.
Postmaster General Louis DeJoy said Wednesday that the service has plans for only 10% of its new truck fleet to be electric, and some politicians are saying the fleet should be more electrified. But investors appear to be facing the likely reality that the contract will not go to Workhorse Group in the end.
Workhorse Group was the only all-electric delivery vehicle maker left as a finalist for the contract. In an update provided after the decision was announced, the company said it intends "to explore all avenues that are available to non-awarded finalists."
Workhorse Group has plans to produce only 1,800 vehicles in 2021. That limited capacity may have contributed to costing the company the contract. Workhorse Group is now valued at less than $2 billion. It also has orders on its books unrelated to the USPS fleet. The ramifications are still settling with investors, and watching its order book and production will tell if it can be a good investment even without the big contract.