EV Maker Workhorse Plummets as Oshkosh Wins Postal Contract

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Electric-vehicle maker Workhorse Group Inc. plunged on Tuesday, triggering multiple trading halts, after a key U.S. Postal Service contract that some had expected it to win went to rival Oshkosh Corp. instead.

The missed opportunity came as a big blow for Workhorse investors, sending the shares 47% lower in New York, the steepest decline since October 2011. Workhorse didn’t immediately reply to requests for comment.

Shares continued to fall in after-hours trading, losing 10%. Oshkosh, which rose 6.1% in the regular session, gained as much as 17% postmarket.

The USPS said that as part of the 10-year contract, Oshkosh Defense will manufacture postal delivery vehicles, which will drive the “most dramatic modernization of the USPS fleet in three decades.” Under the award’s initial $482 million investment, Oshkosh will finalize the design of the vehicle for mail and package delivery, and will assemble 50,000 to 165,000 of them over the contract period.

The vehicles will be equipped with either fuel-efficient internal combustion engines or battery-electric powertrains, USPS said in a statement.

The contract could be worth more than $5.7 billion in revenue over its 10-year lifespan, wrote Bloomberg Intelligence analyst Christopher Ciolino.

In October last year, short seller Fuzzy Panda Research had alleged that Workhorse destroyed its chances of landing the much-anticipated contract after its design and manufacturing led to numerous critical failures in the prototype USPS trucks. Workhorse had declined to comment on the report at that time.

(Adds postmarket trading in third paragraph, BI comment in sixth paragraph)

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