Volvo acquires Proterra’s battery business amidst Proterra’s Chapter 11 bankruptcy

Volvo acquires Proterra’s battery business amidst Proterra’s Chapter 11 bankruptcy — 2023-11-10

Automotive Industry

The $210 m acquisition is contingent upon approval by the bankruptcy court in the United States.

Additionally, the completion of the transaction, expected in early 2024, is subject to merger clearance and certain other conditions.

The assets earmarked for acquisition include a development centre for battery modules and packs in California and an assembly factory in South Carolina. Volvo’s move is poised to complement the company’s current battery-electric roadmap and expedite its plans in the EV sector.

Volvo is optimistic about the transaction, asserting it will have no material impact on its financial performance. The move is seen as a strategic step to reinforce its commitment to sustainable transportation solutions and bolster its presence in the growing electric mobility landscape.

However, this acquisition also carries historical significance, particularly in light of recent events surrounding the bankruptcy of Volta Trucks.

Volta Trucks, not so long ago a prominent player in the electric goods vehicles market, and whose vehicles were embraced by major companies like DB Schenker, DSV or Paulaner, filed for bankruptcy less than a month ago. The company attributed its financial turmoil to the Chapter 11 bankruptcy filing by its battery supplier, Proterra.

Volta Trucks, in its statement confirming bankruptcy, revealed the detrimental impact of Proterra’s financial instability on its manufacturing plans. The sudden turn of events disrupted the production volume that Volta Trucks had anticipated, leading to a cascade effect on its ability to raise capital in an already challenging environment for electric vehicle players.

The unfortunate outcome prompted Volta Trucks’ board to make the decision to file for bankruptcy proceedings.