In yet another example of the need for greater vertical integration int he increasingly complex world of developing and manufacturing zero emission trucks, Swedish truckmaker Volvo has announced it has won the auction to take over the battery business of troubled Proterra in the United States.
Volvo Group appears to have won the fight to take over Proterra with a bid of with a $US210 million in the next chapter of the electric vehicle part supplier’s ongoing U.S. Chapter 11 bankruptcy protection process.
Volvo said in a statement that it aimed to finalise the acquisition, pending approval by the bankruptcy court, early in 2024 .
Volvo Group said the acquisition will ‘complement its current battery-electric business and accelerate the unit’s future’.
The company said it has a three-pronged approach to decarbonisation of its product line — battery-electric, fuel-cell electric and renewable biofuels, and the Gothenburg-based manufacturer aims to have 35 per cent of the vehicles coming off its global production lines to be electric by 2030.
“We entered into the Chapter 11 process with a mission to maximize the potential of each of our product lines. Today, we have taken an important step toward that goal for our Proterra Powered business,” Proterra CEO Gareth Joyce said in a statement on 10th November.
Proterra’s battery production plant is located in Greer, South.Carolina, while its engineering team is based at the company’s headquarters in California’s Silicon Valley.
Volvo Trucks North America subsidiary, Mack Trucks introduced its MD Electric in March using an off the shelf power electric powertrain from Sea Electric and was the first medium-duty electric vehicle from the brand. The company also offers a heavy-duty LR Electric refuse truck. Some in the industry in the US are pondering whether the acquisition of Proterra may signal the end to Mack’s Sea Electric contracts.
When Proterra filed for bankruptcy protection, the company said it hoped to maximise the value of its business lines by selling them off or recapitalising the business. The company’s ambitions were hampered by supply chain disruptions during the COVID-19 pandemic, including the waning appetite of transit systems for its electric buses after widespread lockdowns and the broad shift across businesses toward telework, as well as rising interest rates chipping away at margins.
Proterra went public in June 2021, merging with a special purpose acquisition company, and before that global truck and bus giant , Daimler in vested close to $US400 million in the electric. powertrain and battery specialist, in two investment tranches, fist in 2018 and again in 2021.
An auction of Proterra’s other units, its Transit and Energy business lines, including the company’s Valence fleet and energy management product, took place in the US in the past 24 hours but the outcome is still yet to be revealed the company said.
Among Proterra Powered’s current customers are Phoenix-based Class heavy duty fuel cell electric truck maker Nikola, along with Sweden’s Volta Trucks, which also filed for bankruptcy in October due to supply chain failures, resulting from Proterra’s bankruptcy, and Gaffney, a South Carolina based Freightliner Custom Chassis company, which is a Daimler Truck North America business unit that produces motor homes, delivery vans, commercial buses and school buses.
A spokesman for Volvo said in an email yesterday that it was too early to comment on current or future business, and all possibilities were dependent on merger clearance.
A spokeswoman for Nikola said the company is maintaining open communications with Proterra.
Phoenix-based Nikola previously used batteries supplied by Romeo Power, a company it acquired in August 2022. Less than a year later, in July, Nikola began liquidating Romeo’s assets.
medium duty US truck manufacturer Mullen Automotive bought Romeo’s battery production assets for $3.5 million from Nikola in September.
A spokeswoman for Daimler Truck said that it was business as usual in the Custom Chassis unit’s commercial relationship, and that no further information was available to share at this stage.
Daimler Truck, meanwhile, has plans for supplying its own electric business with components, announcing in .September that it would team up with engine giant Cummins’s zero-emission unit, Accelera and fellow heavy duty ruck maker Paccar to building a factory in the U.S. that will manufacture battery cells for electric commercial vehicles and industrial applications.
Construction of Paccar’s 21-gigawatt-hour plant is expected to cost $US2 billion, with China’s Eve Energy contributing battery cell design and manufacturing expertise.
Meanwhile, Daimler Truck North America and its partners in the proposed Greenlane electric and hydrogen vehicle fueling network expect to break ground at their first sites in early 2024.