Electric Drive Vendor Exits $6.3 Billion Mail Truck Program

December 05, 2018 by Cyndia Zwahlen

There are new delays, and one bidder has exited the U.S. Postal Service’s program to replace its aging fleet of mail trucks with 180,000 next-generation delivery vehicles.

A key subcontractor with electric vehicle experience has told the Postal Service it would withdraw from the program and not participate past the prototype stage, according to a copy of a letter from London EV Co. USA obtained by Trucks.com. The letter also noted that AM General was the partner company.

“Once the prototype contract is complete, LEVC USA will collect its vehicles and conclude its participation in the NGDV Program,” the company said in its letter.

AM General did not immediately respond to a request for comment. It, like all the bidders, is bound by Postal Service nondisclosure agreements.

Prototype program

Five companies out of 15 preapproved contenders in 2016 won the chance to develop prototypes for new, right-hand-drive mail trucks. Several of the winners paired up with smaller, advanced-tech companies in the original slate of 15 companies.

Prototype testing began in fall 2017 and was supposed to wrap up this year, with the winner announced in a deal worth up to $6.3 billion.

LEVC USA was formerly known as Emerald Automotive. Emerald was one of the 15 original companies preapproved by the Postal Service to bid on the new-mail-truck prototype contract. It is a British company with a sales office in Hazelwood, Mo. As early as 2011, it said it hoped to build a manufacturing plant to make hybrid-electric fleet vans, according to news reports.

On Monday, in response to a Trucks.com query, LEVC, the parent company of LEVC USA, officially said it has ended efforts to manufacture light commercial vehicles for the U.S. market. The company, based in Ansty, Warwickshire, England, also said, “We work with a variety of private and public organizations to help them reduce operating costs through the deployment of electrically driven vehicles. Many of these projects are … covered by extensive nondisclosure agreements which can limit media engagement.”

The company, owned by China’s Geely, confirmed it is leaving the U.S. market.

“Given uncertainty in the global automotive market, LEVC USA has decided not to pursue a manufacturing investment to produce light commercial vehicles for the U.S. market,” the company said. “As is normal business practice, we will continue to review our product portfolio and production footprint on a global basis.”

The company also thanked its U.S. supporters.

Geely, which also owns the Volvo car brand, bought the predecessor company of LEVC, London Taxi Co., in 2013. It now makes electric taxi cabs.

No winner until 2019

Tuesday, the Postal Service confirmed that it would not announce the winner or winners of the prototype stage of its next-generation delivery vehicle competition this year, as originally planned.

“It is anticipated that release of a production Request for Proposal (RFP) for NGDV will be determined after completion of the current testing, most likely in early 2019,” said Kim Frum, a spokesperson for the organization. “The Postal Service cannot comment on the companies nor which companies the awardees might be using as subcontractors or team members or other details.”

The Postal Service also continues to struggle with financial challenges as first-class mail delivery declines and competition for its lower-margin package-delivery programs heats up. Coming up with the capital to fund the manufacturing stage of the potential new mail trucks as envisioned in the current program could be difficult.

“Continuing financial losses and business uncertainties create challenges in its ability to undertake the capital spending needs it has identified,” said a June 2018 report from the Government Accountability Office.

Changes

The Postal Service, and any big spending plans, also face potential political headwinds from the government, including the Trump administration, which is looking to restructure the agency.

Tuesday, the U.S. Department of Treasury released its anticipated task force review of the Postal Service that was requested by Trump in April and due in August. Recommendations included sweeping changes such as higher commercial package delivery prices and possibly narrowing the essential postal services that are subject to government price protection.

The report included a recommendation to more clearly define the Postal Service’s universal service obligation, a legal requirement to deliver six days a week to the millions of U.S. addresses. The recommendation raised the possibility that not all types of mail would qualify, including commercial packages.

The fast-evolving commercial package delivery ecosystem, though, has changed even since the task force began its work. Large shippers such as Amazon that are Postal Service customers are setting up their own last-mile delivery programs, which could cut into the share the Postal Service handles for them. The agency’s specifications for its new mail trucks were made about four years ago.

The bidders

For now, the bidders for the NGDV contract still include the original five prime contractors, several of which have foreign ownership, although the vehicles are likely to be built in the U.S.:

• AM General LLC of South Bend, Ind., which makes the Hummer military vehicle, included an internal-combustion engine mail truck prototype with start-stop technology for improved fuel efficiency. Its offerings included a 2-wheel drive and a 4-wheel drive mail truck.

AM General has not named Emerald Automotive or its successor, LEVC USA, as a partner. A public record of a bill of lading shows a November 2017 shipment from Emerald Automotive Design Ltd. in Basildon, Essex, England, to AM General LLC. At a weight of 11,374 pounds and consisting of 36 pieces, the shipment could have been the prototypes for the NGDV program, for which testing was to start in the fall of 2017.

Also, spy shots of the AM General prototype show a steering wheel, instrument cluster and most of a center console that, according to motor1.com, “seems to be borrowed from current Volvo models.” The prototype also had Volvo’s vertically mounted touchscreens system, the website said.

Oshkosh-Ford prototype (Photo: Brian Williams/Trucks.com)

Oshkosh Corp., based in Oshkosh, Wis., is working with Ford Motor Co. to modify a gasoline Ford Transit Cargo van for the Postal Service.

Mahindra prototype (Photo: Brian Williams/Trucks.com)

• India’s Mahindra. Mahindra North America sells tractors and utility vehicles in the U.S. and operates the Mahindra North American Technical Center production facilities in Troy, Mich. Mahindra builds a wide array of trucks, SUVs and commercial vehicles for the Indian market. The postal service truck would be unlike anything it has produced for the United States.

Karsan prototype (Photo: Brian Williams/Trucks.com)

Karsan, a Turkish commercial-vehicle manufacturer. The Karsan truck, which would be built with its U.S. partner, Morgan Olson of Sturgis, Mich., is fully electric, not a plug-in hybrid as previously thought, according to someone with knowledge of the program who asked not to be named because of the sensitivity of the competition.

VT Hackney prototype (Photo: Brian Williams/Trucks.com)

VT Hackney Inc. of Washington, N.C., and its partner, Workhorse Group, offered a battery-electric truck prototype. VT Hackney is part of the Singapore Technologies Engineering Ltd. group of companies.

Each company’s prototypes included different sizes and interior configurations. None of the potential prime contractor companies would comment publicly about the status of the acquisition program.

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2 Responses

  1. Larry Kimura

    Wow, I had no idea AM General was bidding an electric powertrain. That means three of the remaining four competitors bid electrified trucks, leaving only Oshkosh/Ford as the only remaining entry who might have bid a conventional truck, and who knows Ford has said there will be an F150 plug-in for the 2020 model year. I guess the Specs on the USPS NGDV RFP must have really leaned toward an electrified platform.

    Looking at their web site, it appears that the London EV taxi is an extended range EV with a range of 70 all electric miles, but no real details such as motor power, battery size, what internal combustion engine it is using, or if it is 2WD or 4WD. I wonder if a powertrain designed for a London cab would have been strong enough for the NGDV.

    In regards to the delay, how much longer can the USPS wait? Their old LLV delivery trucks are falling apart and costing a fortune to keep running. In addition, the future for the USPS is not letter mail, it is supporting on-line commerce. To do this they need new, efficient and reliable trucks to support this. The longer they wait to purchase new equipment the will suffer from operations and maintenance cost way higher than necessary making it more difficult to operate without a loss. $6 billion for new equipment is expensive, but th is expenditure is the only way for the USPS to remake itself into a viable entity in the future.

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  2. Toomgis

    I voted for the Oshkosh. The post office should use vehicles that are already mass produced by an auto manfacturer. Then they don’t have to pay to produce and maintain a fleet of specialty vehicles like the LLV. That’s why many police departments use the Crown Victoria and newer Ford Explorers as their common service vehicle. Parts for those vehciles are readily available, and the vehicles are easily decommissioned and sold at auction to recoup some money. (After posting this to the older article from March 2018 I remembered these have to be right-hand drive vehicles. That may limit the interest of citizens buying used mail vehicles. But mail carriers that drive a rural route would probably be happy to buy a vehicle that was retired by the post office. Or maybe the retired USPS vehicles could be sold or auctioned in countries that have all right-hand drive vehicles, like Australia.)

    Reading the comments of the older article and how some carriers have to drive through difficult snow and rural terrain it’s obvious there is not a one size fits all vehicle. The post office needs at least a few different delivery vehicles that are made for different route conditions. 1. For city routes a minivan with sliding doors for easy access to the cargo space and can navigate city streets. 2. For rural routes that are likely to have some rugged terrain a larger van like the Oshkosh with cargo capacity, 4×4 and a naturally heigher ride height. 3. For the especially rugged and difficult routes a compact 4×4 with electronic knob/button 4×4 activation, cargo capacity, front winch and possibly a rear winch.

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