The U.S. Postal Service has finalized a contract to replace its mail truck fleet with new Oshkosh Corp. models, almost all of them gasoline powered, after the Biden administration unsuccessfully lobbied for buying more electric vehicles.
The move, announced in a record of decision made public Wednesday, affirms a decision by the independent agency to move forward with a contested plan to begin purchasing as many as 165,000 mail trucks over the next 10 years. As many as 90% of those will run on gasoline instead of climate-friendly batteries, according to the plan.
The decision allows the agency to begin purchasing gasoline-powered trucks from Wisconsin military truck maker Oshkosh Corp. under a $6 billion contract awarded last February. The Postal Service rejected a bid from fledgling electric vehicle specialist Workhorse Group Inc., and resisted pressure from Biden administration officials to boost electric vehicle purchases beyond its planned 10% baseline.
Oshkosh fell 1% to $107.13 at 10:28 a.m. in New York trading. The stock is down 5% this year, compared with an almost 10% drop in the S&P 500. Workhorse fell as much as 3.6% and was down 1.3% to $2.99. The stock has lost almost a third of its value since the beginning of the year.
Postmaster General Louis DeJoy defended the decision, stressing that the fleet replacement is urgent while reiterating the agency will buy additional battery-electric vehicles as more funding becomes available.
“Our commitment to an electric fleet remains ambitious given the pressing vehicle and safety needs of our aging fleet as well as our fragile financial condition,” DeJoy said in a news release. “The process needs to keep moving forward. The men and women of the U.S. Postal Service have waited long enough for safer, cleaner vehicles.”
But the authorization is unlikely to be the last word on the matter.
Environmental groups are preparing to immediately challenge the move in federal court, arguing the Postal Service is illegally justifying its move with a fundamentally flawed analysis of the purchase plan that underestimates greenhouse gas emissions, relies on faulty economic assumptions and fails to consider alternatives.
“The United States Postal Service’s ill-informed and costly decision will lock Americans into an overwhelmingly gas-powered mail delivery system for generations to come,” the Zero Emission Transportation Association, which represents electric vehicle makers such as Rivian Automotive, Inc. and electric utilities such as NRG Energy, Inc., said in a statement. “This decision directly subverts federal regulations and our international commitments — and President Biden’s executive order to electrify the federal fleet.”
Although the Biden administration has limited authority over the Postal Service because it is an independent agency, federal courts have found the USPS is still bound by the National Environmental Policy Act that requires analysis of major policy decisions. And federal courts have previously invalidated government leases sold to private companies after finding that analysis lacking.
The USPS “is playing a very high-stakes game” by “going against what the law requires,” Adrian Martinez, an attorney with the environmental group Earthjustice, said prior to the announcement.
The Postal Service said its approach was best because it will ensure the agency has a “purpose-built right-hand drive vehicle capable of meeting performance, safety, and ergonomic requirements for efficient carrier deliveries to businesses and curb-line residential mailboxes over the entire nationwide system.”
___
© 2022 Bloomberg L.P Distributed by Tribune Content Agency, LLC
