Oshkosh stock dips on potential USPS contract cancellation

Shares of Oshkosh (NYSE:OSK ) Corp experienced a 5% drop following reports that the incoming administration of Donald Trump may cancel the United States Postal Service's (USPS) electric mail truck contract. Ford (NYSE:F )'s stock was as also impacted negatively but was still up 0.4% Friday despite the news.

According to Reuters sources, Trump's transition team is contemplating a series of executive orders aimed at electric vehicles, which includes the possibility of annulling the USPS's plans to electrify its delivery fleet. This initiative is consistent with Trump's campaign pledges to reverse President Joe Biden's climate policies, which are focused on reducing carbon emissions in the U.S. transportation sector.

Trump, who is set to begin his term on January 20, has criticized Biden's climate strategy as unnecessary and potentially harmful to the economy. His team is reportedly examining methods to revoke multi-billion dollar contracts that the postal service has with companies like Oshkosh Corp and Ford. These contracts are for the acquisition of tens of thousands of battery-powered delivery trucks and accompanying charging stations.

In 2023, Congress allocated $3 billion to the USPS as part of a larger $430 billion climate bill dedicated to purchasing electric vehicles (EVs) and charging infrastructure. The USPS's ambitious plan aims to acquire approximately 66,000 electric vehicles, thereby creating one of the nation's most extensive electric vehicle fleets by 2028. Oshkosh is expected to provide around 45,000 electric vehicles, with the rest sourced from major automakers, including Ford. The initial set of 14,000 chargers is set to be provided by Siemens (ETR:SIEGn ), ChargePoint (NYSE:CHPT ), and Blink.

Despite the USPS's autonomous status and its independent governing board, the Trump administration is anticipated to challenge the legal limits of executive power to sever the contract. However, neither Oshkosh nor Ford have issued comments regarding the potential contract cancellation.

The USPS has also not responded to inquiries about the matter. The Trump transition team has not directly addressed the specific plans for the USPS contract. Still, spokeswoman Karoline Leavitt stated, "President Trump will protect the freedom of Americans to drive whichever vehicle they choose, enhance his tough tariffs on Chinese-imported cars, and save the U.S. auto industry for generations to come. No policy should be deemed official unless it comes directly from President Trump."

In 2021, President Biden signed an executive order targeting electric vehicles, with an ambitious goal that 50% of all new passenger cars and light trucks sold would be zero-emission vehicles. This directive called on federal agencies to develop new emissions and fuel standards to accelerate the adoption of electric vehicles.

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Source: Investing.com