Trump May Scrap USPS EV Deals, Pushing Traditional Vehicles to Center Stage

Donald Trump's team is reportedly reviewing options to cancel USPS electric vehicle contracts, signaling a significant policy shift away from decarbonization efforts initiated under President Joe Biden, according to insider sources.

Trump’s Team Targets USPS EV Contracts

According to three sources familiar with the plans, the transition team of Donald Trump is contemplating revoking the contracts for the U.S. Postal Service to electrify its delivery fleet. This would be part of a larger set of executive orders that target electric vehicles.

The announcement, which could be made in the first days of Trump's presidency on January 20, would be in keeping with his campaign pledge to undo President Joe Biden's climate change initiatives, which he has criticized as being both wasteful and harmful to the economy.

Trump is reportedly plotting to undo Biden's more stringent fuel-efficiency regulations and eliminate a $7,500 consumer tax credit for the purchase of electric vehicles, according to Reuters.

USPS EV Contracts Face Market Impact

Reuters was informed by sources that the Trump transition team is currently analyzing potential ways to terminate the USPS's multibillion-dollar contracts with companies like Oshkosh and Ford, which pertain to the procurement of thousands of electric delivery vehicles and charging infrastructure.

Following the Reuters article, Oshkosh's stock dropped about 5% to 105.65 per share.

As a portion of a $430 billion climate measure, Congress allocated $3 billion to USPS in 2023 for the purchase of electric vehicles and charging infrastructure. By 2028, it hopes to have amassed one of the country's biggest fleets of electric vehicles, having purchased some 66,000 of them.

Legal Challenges Loom Over USPS EV Plan

According to the U.S. Postal Service, Oshkosh is anticipated to supply approximately 45,000 electric cars, while the balance will be supplied by prominent manufacturers such as Ford. The United States Postal Service reports that Siemens, ChargePoint, and Blink are supplying the first 14,000 chargers.

Because the United States Postal Service is a separate government organization with its own board of directors, it would be difficult to lawfully terminate the agreement. With his declared policy goals, however, Trump is threatening to push the limits of executive power on several fronts, including trade and government spending.

Although they do not anticipate a complete shutdown, analysts at the investment bank Jefferies noted in a report issued on Friday that the balance of cars may change from electric to fuel-powered, Investing.com shares.

Future of Federal EV Policies

"Given the need for the replacement of aging equipment, we are confident that the USPS will be receiving new vehicles in 2025. The mix of that order could potentially change to appease an administration that is more hostile to (EVs)," the analysts noted.

The goal was to have half of all new passenger cars and light trucks be zero-emission vehicles by 2021, when Biden signed an executive order on EVs. In order to accomplish this, Biden ordered multiple government agencies to establish new fuel and emission requirements that would encourage the rapid purchase of EVs.