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 continued to sell off early Wednesday.
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 Tuesday 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 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. That comes nearly a month after President Biden sought to electrify government fleets.
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