/biz/ - Business & Finance

>>21557139
Look m88:

WKHS vehicles are about $55k a pop, that puts them over the line. Thing is, there's huge subsidies and internal governmental pressures for public adoption of ZEVs. USPS is public sector. California's CARB program is being used as a model for FIFTEEN other states which are supposed to have their goals in place by EoY due to their MoU signed recently. Moreover the "Moving Forward Act" is going to put a lot of fuel on the ZEV fire. They're the sole ZEV contender. The sole green contender. And simply by the virtue of fewest moving parts they're the cheapest vehicle to service. Not to mention they have stakes in LMT to keep them afloat while they mobilize their production line. They're moving 200-300 trucks by EoY.

They won't get the whole contract, ZEVs with minuscule range for last mile delivery simply can't handle the cold weather extremes of the Northern US. Those are some of the least populous states, though. In between the bands in the image, we might see something like mixed deployment. Everything below the fine band can run battery powered vehicles year round with some exceptions due to extreme heat.

The contract is said to be satisfied in 5 to 7 years.

Those CARB vouchers are worth $50k a pop, the federal subsidies are worth $7k a pop. California will be subsidizing full vehicle purchases for USPS, more or less while the vouchers are available. The Federal subsidies are good until WKHS produces 200k units.

There are 180k units in the contract. At the $55k price tag, USPS can't afford issuing the whole contract to WKHS immediately. The 7.5k factors to a 13.6% discount, totaling $8.6bn. I don't know the funding limits of the CARB program, but they total slightly more than $1bn alone. CA has numerous other ZEV programs that USPS /could/ exploit.

https://fundingfindertool.org/?
https://nj.gov/governor/news/news/562020/approved/20200714a.shtml
https://www.congress.gov/116/bills/hr2/BILLS-116hr2eh.pdf -pg2000

>>21030801
There are certain caveats with WKHS's tech, their range might limit them in certain rural municipalities, but you've got to consider most people live in metropolitans, meaning that's where the trucks are going to be concentrated. I suspect they'll get a healthy portion of the contract, quite possibly the majority. Other considerations are temperature extremes. Range is highly dependent on ambient temperatures, so the great white north isn't going to receive these trucks, but that's mostly rural areas. Anywhere that frequently sees below freezing temps probably won't see them (but maybe they've found a means to mitigate range loss). Heat isn't as large of a consideration.

Below the bold line, I'd expect deployment of WKHS trucks, in the interstitial between the bold and the regular line, perhaps we'll see mixed deployment. The region above both I don't imagine we'll see much deployment, if any. The bottom map is population by state. As you can see, on that rough basis, WKHS can target a good majority of the market concentration, thus we might ascertain they'll get the lions share of demand on that basis. There's a lot of political headwind for EVs, especially trucks and busses, so they've got that going for them, and again the subsidies on offer are a great opportunity for them to make even baseless sells.

They're also "dependent" on LMT's position in the market, WKHS is entitled to 1% of unit sales, and 1% of all debt and equity deals. The former is worth $100m. The latter is variable, considering the recent SPAC with LMT, the outcome could prove very favorable to WKHS.

Ultimately, I can't say where the price will go, but my bet is that it will go up, a lot.