Two hundred and thirty-one of the vehicles were delivered to Post Offices in South Florida in 1981, but motor failures and a dispute with the company over warranty terms grounded the fleet less than a year later. “In 1980, the Postal Service ordered 375 futuristic-looking electric delivery vehicles from Commuter Vehicles, Inc., of Sebring, Florida, with plans to buy more in succeeding years. In its history of EVs in the Postal Service, the USPS describes what happened in a 1980 trial: The USPS has cited concerns like “catastrophic battery failure” and loss of power in cold weather. The first test dates back to 1899! However, despite dozens of trials of varying scale, EVs have never succeeded in becoming go-to delivery vehicles. In fact, it has a long history of trying out electric delivery vehicles. An electric fleet should also be less expensive to maintain than vehicles using traditional gasoline engines.ħ Marijuana Stocks for an Election Day Boost No fuel depots required, and there would be much cheaper “fuel” costs. An electric fleet could recharge overnight. It’s focused on in-city delivery of letters and packages, with vehicles that sit unused overnight. The United States Postal Service contract holds huge promise for Workhorse, but it also shows there is risk for WKHS stock.Įlectric vehicles seem like a perfect fit for the USPS.
USPS: A Long History of Electric Delivery Vehicles But if Workhorse lands that USPS contract, September’s performance is going to feel like a rehearsal for the real show. The company has blamed raw material shortage, supply chain bottlenecks, and limited production capacity as key factors that have been hampering a production ramp-up.Sure, this is a disappointment for those who bought in mid-September. So far this year, it has only produced 38. Workhorse is currently planning to build at least 1,000 C-series trucks in 2021. These developments do not add confidence in the ability of Workhorse to deliver on its contractual obligations. Moreover, the truck recently took part in San Felipe 250 racing event but called it quits soon after due to the greater-than-expected energy consumption of the EV. However, Lordstown’s own Endurance electric truck is faltering amid allegations of an inflated order book and the truck catching fire during testing.
As an illustration, Workhorse is expected to rely on the manufacturing prowess of Lordstown Motors ( NASDAQ:RIDE) to fulfill its contractual obligations. Readers should note that a sizable element of risk will still prevail over Workhorse even if it manages to win an additional contract for the electrification of the USPS. Today’s development appears to be the logical next step in this ongoing electrification push by US lawmakers.Īs we’ve detailed previously, the probability of Workhorse becoming a key node in the NGDV contract underpinned much of the stock’s gains in 2020, which at one point amounted to over 800 percent! The contract was considered a vital lifeline for Workhorse and was expected to reverse its accelerating cash burn problem. Following a sizable backlash, Postmaster General Louis DeJoy had told members of the House Appropriations Committee’s financial services and general government subcommittee that the USPS would procure additional electric vehicles if the Congress were to furnish more resources. However, to the consternation of many lawmakers, only 10 percent of that contract consisted of electric vehicles. While analysts had expected a part of the contract to go to Workhorse, that expectation did not materialize. Bear in mind that the USPS had awarded a 10-year Next-Generation Delivery Vehicle (NGDV) contract, worth at least $6 billion, to Oshkosh ( NYSE:OSK) back in February.