The U.S. Postal Service (USPS) said on Tuesday it will hand a multibillion-dollar, 10-year contract to Oshkosh Defense to manufacture a new generation of postal delivery automobiles.
Under the initial $482 million investment, Oshkosh Defense, a unit of Oshkosh Corp, will finalize the production design, testing, and automobile tooling necessary before the vehicle production. The per-vehicle price was not revealed.
The contract, which could be worth over $6 billion in total, allows for delivery of between 50,000 and 165,000 of the vehicles during 10 years, which will be a mix of internal combustion-powered and battery-electric vehicles.
Oshkosh earlier collaborated with Ford Motor on its proposal that includes an earlier prototype based on a Transit van.
The current gas-guzzling USPS delivery vehicles are almost 30 years old on average. An audit report last year said USPS spent $5,000 alone per delivery vehicle on yearly maintenance costs.
Oshkosh shares closed 6.1% higher on the news. Shares of Workhorse Group Inc, a losing bidder that sought to construct electric-only vehicles, were briefly stopped and lost nearly half their value.
USPS started their planning to replace the existing fleet in 2015. Bryant said the internal combustion versions could be retrofitted later as battery electric vehicles.
The USPS fleet has over 230,000 vehicles including 190,000 that deliver mail.
New USPS vehicles will start deliveries in 2023 and include air conditioning and heating, enhanced ergonomics, and advanced vehicle safety technology including airbags and 360-degree cameras. Most of the present delivery vehicles do not have air conditioning or modern safety features. The new automobiles will be able to carry more cargo and better accommodate higher package volumes.
Last month, President Joe Biden vowed to replace the U.S. government’s fleet of roughly 650,000 vehicles with electric vehicles.
