It is deju vu all over again. It is June and the horse is running just like it did 12 months ago when it went from penny stock to over $20 faster than Man O' War ever could run. Today we have a more mature company with over 8,000 trucks on back order and a drone unit that has tested succesufuly 45 out 45 times. That makes me think at $2 Billion which it trades at is already a value to its peers (NKLA $7 Billion Market Cap – Arrival $11 Billion – and Rivian rumored to IPO at $70 Billion).
The big honey pot, of course, was always the USPS deal which was shockingly given to Osh Kosh Defense in a deal that has drawn heavy scruntiy. If you read the press release closely, you notice that OSK has only been awarded $450 million of the deal so far and even more oddly it is a rendering of a truck that has never been tested. Qualified bidders all put vehicles through rigirous USPS testing in various terrain, climate and durabity in the finalist stage. USPS picked a rendering after a half decade of making companies go through all the hoops and ladders. There were three finalist. Workhorse Group, OSK, and Morgan Olson who was partnered with Turkish company Karsan who had a hybrid vehicle that was bypassed.
A month ago, Workhorse announced a partnership deal with a new subsidary of Olson called EAVX. During the earnings call the day of the announcement, Workhorse CEO Duane Hughes kept reffering to a "Next Generation Delievery Vehicle" the two companies were working together on but didn't expand much further on the product. It was intersting terminology as the USPS contract was for a "Next Generation Delievery Vehicle". Morgan Olson has been working on USPS trucks for four decades and took over Grumman who did the USPS trucks currently in use you see today.
Today it was announced that the infrastructure bill has been agreed to and in that bill there was an allotment for $12 Billion for USPS to transition to EVs. Were these two companies told to partner to come up with parts that then could be brought to OSK to do final assembly? Workhorse would provide the chassis, Olson would do the frame, and OSK would mesh the two together. It is definetly a possibilty.
OSK stated in their SEC filing in the fall that they were behind in EV development so could use a partner if USPS wants to transition to a full EV fleet now that the funds are available for them in this bill. It would also play well in Ohio, Wisconsin, and Michigan (all battleground states) getting a piece of a giant government contract and employ thousands of workers in those battleground states.
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