New Postal Service EVs Way Behind Schedule, Cancellation Rumored
After years of delays, the United States Postal Service (USPS) was finally approved for a multi-billion-dollar contract to replace its aging fleet with the new Oshkosh Next Generation Delivery Vehicle (NGDV). Sadly, deliveries of the all-electric vehicle are woefully behind schedule and there are fresh rumors that the Trump administration may simply end the program upon taking office.
If you haven’t been following the story thus far, the USPS had been running the older Grumman Long Life Vehicle (LLV) far longer than anticipated. Production of the LLV officially ended in 1994, with the Postal Service assuming they would have all been replaced after 25 years of operation. Many are still in service, with the USPS supplanting those that have broken down with commonplace models imported from countries where they put the steering wheel on the opposite side of the dashboard or whatever models can be locally sourced on the cheap.
The government formally started seeing a replacement for the Grumman in 2015, prioritizing efficiency and cargo capacity over lifespan. Requirements changed as time went by but Oshkosh Defense had prototypes delivered to the USPS for testing purposes by 2017. Many redesigns later, the company secured a contract to manufacture between 50,000 and 165,000 mail trucks over ten years — with the average per unit cost expected to be roughly $60,000.
In March of 2022, the first contract was valued at $2.98 billion and stipulated that Oshkosh would build 50,000 NGDVs, with 10,000 being all-electric to satisfy certain governmental stipulations. The USPS initially balked at the idea, suggesting that too many routes might pose difficulties for models entirely dependent upon battery power while adding that the gasoline variant was simply cheaper. It likewise stated the necessary charging infrastructure would need to be established to make EVs viable and requested more federal funding, prompting some lawsuits.
The USPS later said it would increase its allotment of all-electric vehicles to 50 percent on its initial order (now delayed) to appease the Biden administration and was given another $3 billion (via the so-called Inflation Reduction Act totaling $430 billion) to further expand the total number of vehicles that could be ordered. The first deliveries were expected in 2023. But that too turned out to be a problem and the per unit price continued to increase.
Many were angry that the government had selected a defense contractor or bemoaned how the per-unit price of the NGVD keeps expanding. Others complained that the new factory (built in Spartanburg, South Carolina) was foolish when Oshkosh could have retooled a preexisting facility. There were even complaints that the manufacturer had decided upon using non-unionized labor. All of these resulted in federal probes that further stalled progress.
Even with the above delays taken into account, Oshkosh was supposed to have manufactured 3,000 vehicles by now. According to The Washington Post, it has only managed to build 93 — mimicking the molasses-slow pace of the federal government’s similarly expensive initiative to field more EV charging stations across the country.
The outlet managed to acquire almost 21,000 government and internal company records and spoke with 20 people familiar with the trucks’ manufacturing and design. The gist of the situation is that Oshkosh had been struggling with production due to defects that keep cropping up. Some of these are general fitment issues while others pertain to weatherproofing electrical components. Oshkosh had allegedly wanted to average 80 vehicles per day and is nowhere near that number, failing to explain why to the USPS.
Meanwhile, Reuters has reported that the incoming Trump administration is considering canceling the Postal Service's contracts to electrify its delivery fleet on the grounds that it’s irresponsible in terms of spending and the needs outlined by the USPS.
From Reuters:
The move, which could be unveiled in the early days of Trump’s administration that begins on Jan. 20, is in line with Trump's campaign promises to roll back President Joe Biden’s efforts to decarbonize U.S. transportation to fight climate change – an agenda Trump has said is unnecessary and potentially damaging to the economy.
Reuters has previously reported that Trump is planning to kill a $7,500 consumer tax credit for electric vehicle purchases, and plans to roll back Biden's stricter fuel-efficiency standards.
The sources told Reuters that Trump’s transition team is now reviewing how it can unwind the postal service's multibillion-dollar contracts, including with Oshkosh and Ford for tens of thousands of battery-driven delivery trucks and charging stations.
Oshkosh has said it remains committed to the cause and can deliver a mix of combustion and battery powered vehicles designed in collaboration with the USPS.
"Oshkosh is fully committed to our strong partnership with the USPS and looks forward to continuing to provide our postal carriers with reliable, safe, and sustainable modern delivery vehicles, even as USPS’ needs continue to evolve," the company stated.
However, its production pace will need to come up dramatically in order to yield the 66,000 units anticipated by 2028 — most of which are supposed to be entirely electric under provisions outlined by the Biden administration.
With Trump’s transition team vocally focused on addressing needless government expenditures, it seems plausible that things could change for the Oshkosh NGVD. The program is inarguably behind schedule and becoming increasingly costly for all parties involved. But the USPS is supposed to have a high level of federal autonomy, making it much easier for the government to grant the Postal Service money than take it away. Severing the contract will be challenging, especially considering that a defense contractor is involved.
The more likely scenario is that the incoming administration will try to steer the USPS toward buying more of the combustion-driven versions of the NGVD, which is what the Postal Service originally wanted to do. This will save some money and will reduce the number of charging points that need to be installed at post offices, saving the government some money in the near term. But we’ll have to see how things shake out.
With Trump vowing to create a Department of Government Efficiency that’s entirely dedicated to reducing government spending, anything is possible. But we’ve also seen Trump’s previous efforts to roll back emissions requirements and deregulate the automotive market blocked by lawsuits from California and like-minded states run by Democrats.
[Image: Oshkosh Defense]
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