Workhorse drops lawsuit against USPS over vehicle contract

It’s a sad song, but, like the Beatles’ Jude, EV manufacturer Workhorse Group is trying to make it a little better. The company has voluntarily withdrawn a lawsuit that it filed against the US Postal Service, after the agency passed Workhorse over for a multibillion-dollar contract to produce the next generation of mail delivery vehicles.

The tawdry tale to date: USPS is planning to replace its ancient fleet of delivery vehicles. Workhorse was one of three finalists for the contract, and the only one offering a fleet of EVs. In light of President Biden’s stated wish to electrify the federal fleet, Workhorse was considered a shoo-in. Alas, after deliberating for nearly a decade, the agency, which is led by Louis DeJoy, a holdover from the Trump administration, awarded the contract to Wisconsin-based Oshkosh Defense, a defense contractor known for building military vehicles. The current plan is to replace only 10% of the fleet with EVs, the rest with fossil-burning vehicles. Congressional Democrats are fighting the decision, and the USPS is fighting to confirm it. At this rate, it may be another decade before the Grumman LLV mail trucks, some of which are over 30 years old, get replaced.

In June, Workhorse filed a lawsuit against the USPS, and it was scheduled to face arguments before a judge on the US Court of Federal Claims this month. However, newly appointed CEO Rick Dauch recently announced that the company would drop the suit.

“Since I joined the company six weeks ago, we have been conducting a deep and intensive overview of all aspects of our business, including an examination of the history of our USPS bid and subsequent protest filing,” said Dauch. “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.”

Dauch said that he saw “multiple business opportunities” for last-mile delivery trucks and drone systems after attending the Advanced Clean Transportation Expo in Long Beach, California, earlier this month. “These opportunities include several commercial industry markets as well as a broad array of initiatives designed to modernize and electrify government-funded and owned vehicle fleets across the country at the federal, state and city level.”

The song is a sad one indeed, and not just for Workhorse shareholders. The USPS’s decision was one of the first indications of the long and bitter struggle that President Biden’s green agenda is going to face. Taxpayers lost an opportunity (for now, anyway) to save billions of dollars and tons of emissions. However, betting on government contracts is a perilous proposition for any company, and when the milk stops flowing, you have to find another cow. There are other opportunities out there for Workhorse, and Dauch’s decision is undoubtedly the right one.

Sources: Reuters, Electrek, FreightWaves