By Jarrett Renshaw and Alexandra Ulmer
(Reuters) – Donald Trump’s transition team is considering canceling the U.S. Postal Service’s contracts to electrify its delivery fleet as part of a broader set of executive orders targeting electric vehicles, according to three sources familiar with the plans.
The move, which could be unveiled in the early days of Trump’s administration starting Jan. 20, is in line with Trump’s campaign promises to support President Joe Biden’s efforts to decarbonize U.S. transportation to fight climate change to roll back – an agenda that Trump believes is unnecessary and potentially harmful to the economy.
Reuters has previously reported that Trump plans to eliminate a $7,500 consumer tax credit for the purchase of electric vehicles, and plans to roll back Biden’s stricter fuel efficiency standards.
The sources told Reuters that Trump’s transition team is now exploring how to unwind the Postal Service’s multibillion-dollar contracts, including with Oshkosh (NYSE:) and Ford (NYSE:), for tens of thousands of battery-powered delivery trucks and charging stations. .
Oshkosh shares fell about 5% to 105.65 per share after the Reuters report.
In a statement on Friday, Oshkosh said it has worked closely with USPS to design and deliver a modernized fleet with a flexible mix of electric and gas-powered vehicles that has received early positive reviews from mail carriers.
“Oshkosh is fully committed to our strong partnership with the USPS and looks forward to continuing to provide our mail carriers with reliable, safe and durable modern delivery vehicles even as USPS needs continue to evolve,” the company said.
Ford did not respond to requests for comment.
In 2023, Congress gave USPS $3 billion as part of a $430 billion climate bill to buy electric vehicles and charging infrastructure. It plans to buy about 66,000 electric vehicles to build one of the country’s largest electric fleets by 2028.
As part of that, Oshkosh is expected to supply about 45,000 electric vehicles, with the remainder coming from mainstream automakers such as Ford, the USPS said. The first batch of 14,000 chargers will be delivered by Siemens (ETR:), ChargePoint (NYSE:) and Blink, according to the USPS.
The USPS is an autonomous federal agency with its own board of directors, which makes breaking the contract legally challenging. But Trump’s stated policy goals are poised to test the limits of executive power on a range of issues, from trade to federal spending.
In a note published Friday, analysts at investment bank Jefferies said they don’t think a total cancellation is too likely, but said the mix of vehicles could shift from electric vehicles to fuel-powered vehicles.
“Given the need to replace aging equipment, we are confident that the USPS will receive new vehicles in 2025. The mix of that order could potentially change to appease an administration that is more hostile to (EVs),” the analysts wrote. .
The USPS did not respond to requests for comment.
Trump’s team did not comment directly on plans for the USPS contract.
“President Trump will protect Americans’ freedom to drive any vehicle, increase his harsh tariffs on cars imported into China, and save the American auto industry for generations to come. No policy should be considered official unless it comes directly from President Trump. Karoline Leavitt, spokeswoman for the Trump transition team, said in a statement.
In 2021, Biden issued an executive order on electric vehicles declaring that 50% of all new passenger cars and light trucks would be zero-emission vehicles. To achieve that goal, Biden directed several federal agencies to create rules for new emissions and fuel standards aimed at accelerating the adoption of electric vehicles.
