Workhorse, a start-up that aims to become a major electric vehicle maker, received bad news Tuesday: it lost a $ 482 million deal to make tens of thousands of vehicles for the United States Postal Service . And now investors are punishing his stocks.
The company’s shares fell nearly 50 percent on Tuesday following the postal service’s announcement and fell another 10 percent in afternoon trading on Wednesday.
Workhorse, an Ohio-based company with a factory in Indiana, relied on the postal contract to drive sales. By early February, stocks had gone from under $ 2 to over $ 40 in less than a year, mostly in hopes of winning all or part of the postal deal. Instead, the Postal Service outsourced the work to Oshkosh Defense, a subsidiary of Oshkosh Corporation in Wisconsin that makes military vehicles and mobility systems.
As part of an initial contract for what the postal service calls the next generation delivery vehicle, Oshkosh will complete the design and then assemble 50,000 to 165,000 vehicles over a 10-year period.
Oshkosh vehicles will be fitted with either fuel-efficient gasoline engines or electric batteries and will be upgraded to keep up with advances in electric vehicle technology, the postal service said. Workhorse suggested delivering an all-electric contract.
The Workhorse Group, which employs approximately 130 people and had sales of less than $ 1 million for the first nine months of last year, was for the Goliath of Oshkosh, which had corporate sales of $ 8.4 billion in fiscal 2019 , a David.
On Wednesday, Workhorse said in a statement that it “has asked the postal service for more information in accordance with the rules of the tender process” and that it “intends to explore all the options available to an unsuccessful finalist in a state tender process”.
