This morning USPS put out a press release giving an update to their fleet electrification plans. You can read the full release here and an article from the Washington Post with some additional color. Here we'll just be focusing on the relevant implications to Canoo.
In our last article on the topic, we estimated the total amount for "commercial off the shelf" vehicles to be electric was about 8,800 out of 34,500 total ordered - at that time USPS had indicated they would order the COTS over a 2 year period. Todays update gives us more exact numbers and an expanded purchase window.
USPS will increase the COTS order from 34,500 to 46,000 models from automakers through 2028
Of the 46,000 COTS being purchased, they expect 21,000 to be battery electric delivery vehicles.
Acquisitions delivered in 2026 through 2028 are expected to be 100% electric.
Feasibility of achieving 100% electrification for the overall Postal Service delivery vehicle fleet will continue to be explored.
Beyond vehicle mix changes, postal network modernization efforts will drive additional substantial carbon reductions through logistics improvements and reduced transportation
For any COTS vehicles purchased, the Postal Service will include a preference for domestic manufacturing.
This update is great news for Canoo and gives us more confidence in a larger order from USPS, especially with the focus on American manufacturing. With the window opened through 2028 and greatly expanded to over 20k vehicles, this gives Canoo more time to refine and ramp their own production capabilities. Their Oklahoma City facility is expected to have an annual run rate of 40,000 by the start of 2025, so that facility alone should be able to handle any postal volume even if they do run into some hiccups in the ramp process. Canoo was able to adapt their Pick Up platform to meet US Army specifications and requirements in a neck breaking 100 days; we have no doubt they can satisfy the Postal Service in similar fashion if they wanted any special upfitting considerations to really specialize them for USPS use.
The Postal fleet has over 220,000 vehicles, the current plan is to replace 106,000 of them by 2028 and the original goal was to replace them all by 2035. This leaves another 114,000 vehicles on the tabel for future awards. Obviously not all of those are for "last mile deliveries" and It's interesting that USPS is on the path to modernize their network and improve logistics. Reorganizing their current structure in conjunction with a a modern EV fleet presents a lot of opportunity to make the entire process more efficient. Similar to how Walmart has Gatik running autonomous delivers from distribution center to local store fronts, we could envision a future where the post office is doing similar things and utilizing Canoo MPDV models(we fully believe that Walmart will end up using Gatik tech on Canoo vehicles as well some day) We look forward to putting out the next article on this long drawn out drama and hopefully include details about a purchase order for Canoo USPS Postal Delivery vans!
Authors disclosures: I am long Canoo - I own common shares, warrants and call options.