Electric truck manufacturer Workhorse Group said it is exploring ways to challenge losing a U.S. Postal Service contract to build the next-generation mail truck.
“We intend to explore all avenues that are available to us,” said Duane Hughes, chief executive of the Loveland, Ohio, company.
The changing composition of the Postal Service’s board of governors following appointments made by the Biden administration also might favor Workhorse’s efforts to sell the post office electric mail trucks, Hughes said during a conference call with industry analysts and investors on Monday.
Biden signed an executive order directing federal officials to draw up plans to convert the federal government’s 645,000-vehicle fleet to “clean and zero-emission vehicles.”
While that includes mail trucks, the Postal Service operates as an independent agency with its own board of governors that decides how its funding is spent.
“What President Biden is doing is putting the board of governors together in such a way to support his plan going forward,” Hughes said.
Hughes has scheduled a Wednesday meeting with Postal Service officials “to understand better the decision-making process as well as any potential steps.”
Workhorse was one of several contenders for a contract expected to eventually total more than $6 billion to replace the aging fleet of mail trucks.
Last month the. Postal Service awarded a 10-year contract to Oshkosh Defense to produce the next mail truck. The Postal Service said the program would launch “the most dramatic modernization of the USPS fleet in three decades.”
Under the terms of the deal, Oshkosh, Wisc.,-based Oshkosh will get a $482 million contract to complete the production design of what the Postal Service is calling the “Next Generation Delivery Vehicle.” The agreement also provides Oshkosh funds to pay for tooling and factory configuration needed before launching production.
The post office now uses about 140,000 Grumman Long Life Vehicles for its main delivery service. Manufactured from 1987 through 1994, they need to be replaced. A 2014 audit from the USPS inspector’s office found that the current fleet could only meet the agency’s delivery needs through the 2017 fiscal year.
Although the Postal Service has considered using electric vehicles for its new fleet, just 10 percent of the vehicles in the Oshkosh contract would be electric, Postmaster General Louis DeJoy said at a recent Congressional hearing.
He said the cost of buying an all-electric fleet and adding infrastructure to post office facilities to keep the vehicles charge would be too expensive.
But electric vehicle proponents noted that such trucks have far less maintenance and fueling expenses than internal combustion vehicles. The agency will eventually have to add charging infrastructure as states such as California begin to phase out gas trucks.
Oshkosh said it has a plan to convert internal combustion trucks to electric vehicles over the course of service in the post office’s fleet.
Workhorse, which is just beginning to turn out electric commercial vehicles, said its offering was best suited for the type of routes the Postal Service operates.
“It’s going to stop many, hundreds of times throughout that [daily] duty cycle and that puts a lot of different demands on a vehicle,” Hughes said.
Following the contract’s award to Oshkosh, Workhorse shares fell by about 50%, and they have not recovered.
But Hughes said the company has good prospects outside of the Postal Service contract as California and New York approve subsidies for its electric trucks and it grows its production capacity and sales channel.
Workhorse is also working with UPS to test a truck-based drone package delivery system.
“I’ve always said that with or without the post office, we have a business and we have to focus on building that business,” Hughes said.