After deliberating about a long-overdue modernization of its vehicle fleet for nearly a decade, the US Postal Service has awarded a 10-year contract to Wisconsin-based Oshkosh Defense to manufacture a new generation of postal delivery vehicles.

Under the contract’s initial $482-million investment, Oshkosh will finalize the production design of the Next Generation Delivery Vehicle (NGDV), a purpose-built, right-hand-drive vehicle for mail delivery, and will assemble 50,000 to 165,000 of them over 10 years.

Defying President Biden’s wish to electrify the US government’s vehicle fleet, the USPS announced that the new vehicles “will be equipped with either fuel-efficient internal combustion engines or battery electric powertrains and can be retrofitted to keep pace with advances in electric vehicle technologies.”

The news was a crushing blow to the Workhorse Group, which had proposed an all-electric delivery vehicle, and was seen as the leading contender for the contract. Shares of Workhorse (Nasdaq: WKHS) dropped more than 50% on the news. Workhorse’s EVs are designed for last-mile delivery, and its current customers include UPS and FedEx Express.

USPS Chief Executive Officer Louis DeJoy gained notoriety during the recent election for allegedly sabotaging his own agency’s performance in order to suppress mail-in votes. His decision to award the contract to Oshkosh, a company that specializes in military vehicles and has apparently never built an EV, is bound to be a controversial one.

The Postal Service says it “awarded the Oshkosh Defense contract in accordance with competitive Postal Service procurement policies after extensive testing of prototype vehicles, evaluation of offered production proposals, and discussions of technical specifications with the offerors.”

Sources: USPS, CNBC
Photos courtesy of USPS