Under pressure from the Biden administration, several states, and the UAW, the USPS this week announced “at least 50 percent of newly ordered NGDVs in the current contract are expected to be battery electric vehicles.” NGDV in postal-speak stands for “next generation delivery vehicle.”
Originally, the postal service said only 10% of its new delivery vehicles would be battery electrics. It has selected Oshkosh Defense as the prime contractor to build the vehicles that will replace those in use today, some of which are 30 years old and require constant maintenance to keep running.
Oshkosh Defense knows how to build military vehicles, but has no experience with small civilian vehicles like those USPS uses to deliver the mail. It also has virtually no experience with battery-electric vehicles. Then the company decided to run away from its unionized workers in its home state of Wisconsin to aggressively non-union South Carolina, which ignited a firestorm of criticism from the UAW.
The latest press release also contains these bullet points:
- The Postal Service commits to evaluate vehicle mix and purchase capability in shorter intervals as technology evolves and the organization’s financial and operational picture improve
- The Postal Service expects a procurement of 34,500 commercial off-the-shelf (COTS) vehicles to supplement the current purpose-built NGDV order, including as many BEVs as are commercially available, and satisfy operational needs
- The Postal Service expects that at least 40 percent of the total quantity of NGDVs and COTS vehicles covered by the SEIS will be BEVs
Unpacking The News From USPS
The biggest news in this latest announcement is that not only USPS will buy vehicles from Oshkosh Defense, over the next two years it will also purchase 34,500 off the shelf commercial vehicles, of which “as many BEVs as are commercially available” will be included. Hmmmm. Who do we know that has a bunch of smallish battery-powered delivery vehicles available?
The Rivian van is too big and Amazon has first dibs. Brightdrop? Too big and not in full production. Ford? The E-Transit is too big and there is no electric version of the Transit Connect. Ram has a small van but it’s not electric. Frankly, there aren’t many manufacturers with a bunch of battery-electric delivery vehicles laying around in inventory just waiting for the phone to ring.
Arrival has the right truck, but no current manufacturing capability. Tesla has no interest in delivery vehicles. Local Motors could 3D-print them, but it is out of business. Workhorse thought it had the right vehicle for the job but it performed poorly in testing and who knows if they have improved it? Here’s a thought. Walmart just threw Canoo a lifeline by ordering 4,500 electric delivery vans, but does Canoo have the manufacturing capacity? And who has contracts in place to provide enough batteries to supply a fleet of vehicles for USPS?
Oshkosh To Delivery More Battery-Powered Vehicles
In addition to those 34,500 off the shelf vehicles, USPS now says 50% of the vehicles it will buy from Oshkosh Defense will be battery powered. That’s up from 10% originally. The current contract with Oshkosh Defenses is for 50,000 vehicles, so now 25,000 of them will be battery-electrics. That’s good news. EV advocates might prefer the figure was more like 90%, but things have improved since the original contract was announced.
In total, USPS anticipates purchasing 165,000 new vehicles over the next 10 years. For now, 50,000 will come from Oshkosh Defense and 34,500 from other manufacturers. It says 40% of those 84,500 vehicles will be battery-electric and that it will continue to evaluate and procure vehicles “over shorter time periods to be more responsive to its evolving operational strategy, technology improvements, and changing market conditions, including the expected increased availability of BEV options in the future.”
That may be a signal that the door is wide open for more battery-electrics to be included. All that is needed is for one or more manufacturers to walk through it by building BEV delivery vans that meet the needs of the USPS to market.
Keeping Those Old Trucks Going
While all this good news is welcome, those old USPS trucks are going to be with us quite a while longer until the new vehicles to replace them start to arrive. The postal service says its going to cost a lot of money to keep those old trucks functioning. It told Reuters This week it will “also need to make significant investment in the repair of over 50,000 aging” delivery vehicles “each year to continue extending their useful life, despite the significant operational risk, significant maintenance costs, and the higher emissions of greenhouse gases.”
By the time the USPS fleet gets replaced, some of those existing vehicles will be 40 years old or more. Perhaps once the lower fuel and maintenance costs of electric vehicles begin to make an impression on the powers that are at the USPS and their political masters, the uptake rate of battery-electric vehicles will begin to accelerate. In a straight-up head to head comparison between electric vehicles and those powered by infernal combustion engines in fleet service, BEVs will always be the clear winner. The USPS experience will just confirm what we already know.
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