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Workhorse Group Meeting With USPS to Discuss Electric Vehicle Contract Loss

By Eric Volkman - Mar 1, 2021 at 11:26PM

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The powwow is scheduled for Wednesday.

Up-and-coming electric vehicle (EV) maker Workhorse Group (WKHS -4.04%) is not taking a recent high-profile defeat lying down. Company CEO Duane Hughes said in an analyst conference call on Monday that company officials will meet with U.S. Postal Service (USPS) management Wednesday to discuss the latter's recent awarding of a next-generation vehicle manufacturing contract for delivery trucks.

Workhorse was a finalist for that contract, but in the end lost out to a subsidiary of veteran manufacturing company Oshkosh. Workhorse investors were hopeful that their company would prevail, as the arrangement would have vaulted it to the upper ranks of specialty EV manufacturers.

Postal carrier carrying packages next to a USPS truck.

Image source: United States Postal Service.

It's a 10-year deal that the government agency describes as "the most dramatic modernization of the USPS fleet in three decades." It calls for the manufacture of at least 50,000 trucks over that period; Oshkosh is receiving an initial payment of $482 million for this work. While the USPS is one of the more financially strapped government entities, as a federal agency it's considered to be an extremely reliable business partner nevertheless.

The USPS delivery trucks currently used are traditional internal combustion engine (ICE) vehicles made by Northrop Grumman. True to their name -- the Grumman Long Life Vehicle -- these automobiles have been in service since 1987.

Following the USPS's awarding of the contract to Oshkosh, Workhorse issued a press release in which it said that it "intends to explore all avenues that are available to non-awarded finalists in a government bidding process."

Separately, Workhorse on Monday released its Q4 2020 results. For the period, the company's net sales increased to $652,000 from the $3,000 in the year-ago quarter. Thanks largely to income derived from its investment in Lordstown Motors, net profit ballooned to $280.5 million from $655,000. 


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Stocks Mentioned

Workhorse Group Inc. Stock Quote
Workhorse Group Inc.
$2.85 (-4.04%) $0.12
Northrop Grumman Corporation Stock Quote
Northrop Grumman Corporation
$454.87 (-0.96%) $-4.41
Oshkosh Corporation Stock Quote
Oshkosh Corporation
$90.20 (-1.65%) $-1.51
Lordstown Motors Corp. Stock Quote
Lordstown Motors Corp.
$2.35 (-1.67%) $0.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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