EV manufacturer Workhorse Group announced it is voluntarily withdrawing its legal challenge against the United States Postal Service (USPS). The June lawsuit addresses the USPS awarding a multibillion-dollar contract to Oshkosh Defense to produce its next fleet of mail delivery vehicles. Workhorse’s new CEO was behind the decision to forfeit the protest, citing an intention to cooperate with the government on future EVs, rather than challenge it through litigation.
Workhorse Group is an EV manufacturer specializing in delivery vans with roots that go back to 1998 and the development of a stepvan chassis. AMP Electric Vehicles took over the Workhorse Chassis name in 2015 and rebranded it at Workhorse Group, focusing on electrified delivery vehicles.
After licensing its W-15 electric pickup design to Lordstown Motors in 2019, Workhorse Group focused on electrified last-mile delivery solutions, garnering a slew of orders in early 2021. However, the company has since struggled to meet production targets.
One potential suitor was the USPS, for which Workhorse became one of three bidding finalists for the contract, and the only one to bid for an entire fleet of BEVs.
While the company thought its strategy was in line with the Biden administration’s announcement to transition all government fleets toward 100% electrification, its proposal was rejected.
Instead, the USPS awarded the 10 year contract worth over $6 billion to Oshkosh Corp., a Wisconsin-based defense contractor known for building military vehicles. Following the news, Workhorse’s stock plummeted 47%.
Workhorse Group filed a lawsuit against the USPS this past June, citing that Oshkosh was planning to deliver mostly ICE powered vehicles alongside some BEVs. Furthermore, the Postmaster General would only commit to electrifying an anemic 10% of the fleet consisting of 50,000 to 165,000 new vehicles.
Workhorse appears to have had a change of heart and seeks to take advantage of other business opportunities both inside and out of the US government spectrum.
Workhorse withdraws legal protest against USPS
A recent report from Reuters shared news that Workhorse Group had in fact dismissed its legal challenge against the USPS for its decision to award its fleet revamp contract to Oshkosh Corp.
The challenge was previously scheduled to face arguments before a judge on the U.S. Court of Federal Claims today. The decision comes from newly appointed CEO Rick Dauch, who took over just six weeks ago following several quarters of Workhorse not hitting production targets.
According to Freightwaves, Dauch reportedly saw “multiple business opportunities” for Workhorse’s last-mile delivery trucks and drone systems while visiting the ACT Expo in Long Beach, CA, this month.
In addition to other opportunities outside of the USPS snafu, Dauch looks to move the company forward. Furthermore, Workhorse wants to keep the door open for future contracts with the US government as it looks to expedite fleet vehicle electrification.
The federal government has announced its intention to replace its fleet with electric vehicles, and we believe that the best way for us to work with any governmental agency is through cooperation, not through litigation. By withdrawing our protest, we can also better focus our time and resources on initiatives that we expect will be more productive for our company.
This move marks the first positive checkmark on Dauch’s CEO report card as he looks to right the ship at Workhorse HQ.
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