The U.S. Postal Service’s ambitious fleet electrification program faces potential disruption as Donald Trump’s transition team explores canceling multi-billion dollar contracts with Oshkosh Corporation and Ford Motor Company. The news, first reported by Reuters, sent Oshkosh shares down 5% to $105.65.

The USPS program, backed by $3 billion in federal funding, aimed to deploy 66,000 electric delivery vehicles by 2028, representing one of the largest commercial EV fleet transitions in North America. The initiative included approximately 45,000 vehicles from Oshkosh Defense and additional units from Ford, supported by charging infrastructure from Siemens, ChargePoint, and Blink.

The potential cancellation represents more than just a setback for individual manufacturers. The USPS contract has been viewed as a crucial proving ground for large-scale fleet electrification, offering valuable data on reliability, operational costs, and charging logistics in diverse climate conditions. Its success or failure could influence other fleet operators’ EV adoption decisions.

For Ford, which has invested heavily in commercial electric vehicles like the E-Transit, the potential loss of the USPS contract could impact production scale efficiencies at its EV manufacturing facilities. The automaker has positioned fleet electrification as a key element of its broader electric vehicle strategy.

The situation also creates uncertainty for charging infrastructure providers. The planned deployment of 14,000 chargers would have established one of the nation’s most extensive commercial charging networks, providing real-world data on large-scale charging management and grid integration.

Market implications extend beyond the directly affected companies. The potential policy shift suggests broader headwinds for commercial fleet electrification, which many analysts consider crucial for achieving economies of scale in EV production. Fleet orders typically provide manufacturers with predictable demand and help stabilize production planning.

While the USPS operates as an autonomous federal agency with its own governing board, making contract cancellation legally complex, the situation highlights the broader uncertainty facing EV initiatives tied to federal policy. The news follows earlier reports about potential changes to EV tax credits and fuel efficiency standards, suggesting a comprehensive shift in federal transportation policy.

The development occurs as major automakers are navigating complex decisions about EV investment and production scaling. Companies like General Motors and Ford have recently adjusted their EV strategies, citing changing market conditions and the need to balance electric and internal combustion vehicle production.

For the broader EV industry, the potential unwinding of the USPS program raises questions about the stability of government fleet contracts as a foundation for scaling up electric vehicle production. The situation may prompt manufacturers and suppliers to reassess their reliance on government procurement programs for long-term planning.

Photo courtesy of USPS / X.