Oshkosh Stocks Plummet Amid Potential USPS Contract Cancellation
Oshkosh Corp shares fell 5% on news that Donald Trump's incoming administration may cancel the U.S. Postal Service's (USPS) electric mail truck contract. Ford's shares were also negatively affected by this news but were still up 0.4% on Friday despite the announcement.
According to Reuters, Trump's transition team is considering a series of executive orders related to electric vehicles, which may include the possibility of canceling USPS's plans to electrify its delivery fleet. This initiative aligns with Trump's campaign promises to reverse President Joe Biden's climate policies aimed at reducing carbon emissions in the U.S. transportation sector.
Trump, who will take office on January 20, criticized Biden's climate strategy as unnecessary and potentially harmful to the economy. His team is reportedly exploring ways to cancel the billions of dollars’ worth of contracts USPS has with companies like Oshkosh Corp and Ford. These contracts were for the acquisition of thousands of battery-powered delivery trucks and accompanying charging stations.
In 2023, Congress allocated $3 billion to the USPS as part of a broader $430 billion climate bill aimed at purchasing electric vehicles (EVs) and charging infrastructure. USPS's ambitious plan aims to create one of the largest electric vehicle fleets in the country by purchasing approximately 66,000 electric vehicles by 2028. While Oshkosh is expected to supply about 45,000 electric vehicles, the rest is planned to be sourced from major automakers, including Ford. The first set of 14,000 charging stations is expected to be provided by Siemens, ChargePoint, and Blink.
Despite USPS's autonomous status and independent board, it is anticipated that the Trump administration would stretch the legal boundaries of executive power to terminate the contract. However, neither Oshkosh nor Ford commented on the potential contract cancellation.
USPS also did not respond to inquiries regarding the matter. The Trump transition team did not specifically address plans for the USPS contract. However, spokesperson Karoline Leavitt stated: "President Trump will protect the freedom for Americans to drive the vehicles they want, strengthen tariffs on vehicles imported from China, and save the U.S. automotive industry for generations. No policy should be considered official unless it comes directly from President Trump."
In 2021, President Biden signed an executive order targeting electric vehicles, setting an ambitious goal that 50% of all new passenger cars and light trucks sold must be zero-emission vehicles. This directive called for federal agencies to develop new emission and fuel standards to accelerate the adoption of electric vehicles.
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