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Workhorse meeting with USPS about lost mail truck bid

Industrial EV startup Workhorse could have a “face-to-face” with the USA Publish Workplace on March third to search out out extra about the company’s choice to have protection producer Oshkosh construct the brand new fleet of mail vehicles. Workhorse was the final remaining bidder pitching to construct an all-electric fleet, an concept that President Biden supported with an government order shortly after he took workplace.

“This isn’t the consequence we had anticipated or hoped for,” CEO Duane Hughes mentioned on a convention name Monday morning following the discharge of Workhorses monetary outcomes for 2020. “To be clear, we intend to discover all avenues which are obtainable to us.”

Requested about the meeting, USPS spokesperson Kim Frum mentioned she has “no info I’m able to share right now.”

The USPS introduced the brand new truck final week after a yearslong bidding course of that noticed a number of producers from all over the world construct and pitch prototypes in hopes of profitable the contract, which might in the end be value billions of {dollars}. A brand new mail car is desperately wanted, as the present vehicles — which had been constructed by protection contractor Grumman — are being stretched previous their anticipated expiration date, which is costing the company a fortune. Many vehicles have even caught fireplace. Additionally they don’t have trendy options like air con or airbags.

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“This isn’t the consequence we had anticipated or hoped for.”

Oshkosh’s mail truck addresses many of those issues. However following final week’s announcement, Postmaster Basic Louis DeJoy advised Congress that solely 10 p.c of the brand new mail vehicles constructed by Oshkosh shall be electrical. Oshkosh and the USPS declare the autos shall be designed to be transformed from gasoline to electrical energy at a later date however didn’t provide any projections about how a lot that can price, who can pay for it, or some other info about this a part of the plan.

Workhorse doesn’t have a lot of a observe report thus far relating to execution, although UPS is likely one of the firms that has ordered its autos. And its likelihood of profitable the bid appeared to enhance early this 12 months when President Biden signed an government order directing federal officers to come back up with a approach to swap over your entire authorities fleet to electrical autos. (The USPS mail autos make up about a 3rd of the greater than 600,000 autos within the authorities fleet.)

Hughes mentioned on the decision that he believes Biden’s choice so as to add new governors to the board that oversees the USPS is a part of an effort to unseat DeJoy and to additional help the push to impress the mail fleet.

Whatever the final result of the meeting with the USPS, Hughes and Workhorse CFO Steve Schrader spent a lot of Monday’s name reassuring buyers that the startup has a path ahead with out the contract.

“I’ve at all times mentioned this: with or with out the Publish Workplace, we’ve got a enterprise right here, and we’ve got to deal with with the ability to construct that enterprise,” Hughes mentioned, although he acknowledged the mail truck contract would have been a “game-changer.”

Workhorse raised a ton of cash in 2020

To that finish, Hughes and Schrader spoke at size about how Workhorse now has greater than 8,000 orders for its business electrical supply vehicles and the way it plans to work via that backlog. The startup logged simply $1.4 million in gross sales in 2020, with $652,000 of that coming within the remaining quarter of the 12 months. The price of these 2020 gross sales was some $13 million, too, since Workhorse’s output was so low for the 12 months because it dealt with a COVID-19 outbreak at its Ohio facility.

Schrader mentioned Workhorse is making an attempt to scale as much as making as many as three vehicles per day this month, with the objective of creating 10 per day by the tip of June. Reaching a manufacturing output of 200 vehicles per thirty days would let Workhorse break even, Schrader mentioned.

Workhorse has bled cash for years however was capable of survive due to loans from hedge funds and by promoting off elements of its enterprise. The most effective instance of that’s Lordstown Motors, an electrical pickup truck startup created by former Workhorse CEO (and founder) Steve Burns. Workhorse principally handed over the mental property (and order e-book) for a pickup truck it had developed to Lordstown Motors in trade for a 1-percent slice of any funding the brand new startup raised, a royalty on the primary 200,000 autos bought, and a 10-percent possession stake.

That possession stake is now value round $330 million, based on Workhorse’s newest monetary report filed Monday. Lordstown Motors additionally went public in late 2020, and so Workhorse in the end netted $4.8 million on account of the accompanying funding spherical.

That’s along with some $270 million of separate funding that Workhorse locked down in 2020.

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“For sure it’s been an unimaginable 12 months for us,” Hughes mentioned.

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