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Workhorse Shares Rally On Report Of Congressional Democrats Moving To Block USPS, Oshkosh Deal

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Workhorse Shares Rally On Report Of Congressional Democrats Moving To Block USPS, Oshkosh Deal

Shares of Workhorse were hit hard this week after it was announced the company failed to win a large contract with the U.S. Postal Service. More news from Washington, D.C. on Thursday sent the stock rallying into the close.

What Happened: The United States Postal Service announced a contract Tuesday with Oshkosh Corporation (NYSE: OSK) to produce the post office's next-generation delivery vehicle.

An initial contract worth $482 million will see Oshkosh produce the new vehicles. The deal could be worth as much as $6 billion for up to 165,000 vehicles.

Bloomberg reported on Thursday that Congress is considering blocking the USPS and Oshkosh partnership.

Related Link: Cathie Wood Buys The Dip In Workhorse Again

Why It’s Important: A decision to block the deal could come from the lack of electric vehicles making up the new post office fleet.

Only 10% of the next-generation vehicles would be fully electric, according to Reuters.

Postmaster General Louis DeJoy was criticized by Congress when he discussed the new deal.

“The vehicles will be equipped with either fuel-efficient internal combustion engines or battery electric powertrains and can be retrofitted to keep pace with advances in electric vehicle technologies,” the USPS said in the deal announcement.

Workhorse Group Inc (NASDAQ: WKHS), which was one of three finalists for the USPS contract, has an all-electric vehicle offering that could become a frontrunner again if Congress pushes for the contract to be awarded based on electrification. 

See also: How to Buy Electric Vehicle (EV) Stocks

President Joe Biden has vowed to replace the entire 650,000-vehicle government fleet with electric vehicles.  

OSK, WKHS Price Action: Shares of Workhorse gained 24.72% in Thursday's regular session and were giving back 9.91% and trading at $17 in the after-hours session.

Oshkosh shares lost 3.94% in the regular session and were down another 2.49% at $105.80 in after-hours trading. 

 

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