Workhorse Group has been passed over for an important contract with the U.S. Postal Service, causing its shares to drop by almost 50 per cent on Tuesday.
The USPS awarded the first part of a 10-year contract to modernize the postal delivery fleet to Oshkosh Defense. The deal is initially worth $482 million and will see Oshkosh, a military vehicle manufacturer, produces 50,000 to 165,000 vehicles over a 10-year period. The vehicles will feature either fuel-efficient gasoline engines or will be all-electric.
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CNBC notes that Workhorse stock was halted a handful of times during the last half hour of trading due to heightened volatility. The company finished the session with a loss of 47.5 per cent compared to the start of the day. After-hours trading saw another 10 per cent wiped off the company’s share price.
It’s not all bad news, however, as shares in Workhorse Group are still up 347 per cent over the last year. Workhorse Group already has partnerships with UPS and FedEx Express. The company was founded in 1998 and in late 2016, announced that they were working on an all-electric pickup truck dubbed the W-15. Workhorse was co-founded by Steve Burns who left the company a few years ago and went on to form Lordstown Motors. Workhouse ultimately killed off the W-15 project in early 2020 to continue its main focus on vans and last-mile delivery systems.
