Volvo Group is buying the Proterra Powered business unit as part of the voluntary Chapter 11 bankruptcy proceedings of Proterra Inc. and Proterra Operating Company Inc. Volvo was the winning bidder in an auction for a price of $210 million.
Proterra voluntarily filed for Chapter 11 bankruptcy in August, saying that market and macroeconomic headwinds had affected its ability to scale all of its opportunities simultaneously — which included vehicle and equipment electrification for OEMs, zero-emission transit buses, and charging solutions.
When announcing its bankruptcy, Proterra said it planned to sharpen its focus as a supplier of EV battery technology — the Proterra Powered business, which has offered battery technology, drivetrains, vehicle electrification and e-mobility technology to vehicle makers.
The assets to be acquired include a development center for battery modules and packs in California and an assembly factory in South Carolina.
Proterra produced the first Proterra Powered EV battery at its new Powered 1 battery manufacturing plant located in Greer, South Carolina, in January. This high purpose-built, high-volume battery production plant was built with plans to have multiple gigawatt hours of annual production capacity.
Greer is a little more than 200 miles away from Dublin, Virginia, where Volvo Trucks North America's New River Valley Assembly Plant is, and where it makes the Volvo VNR Electric.
The acquisition will complement Volvo’s current battery-electric road map, according to the company, and accelerate its zero-emissions future. Closing of the transaction is expected in early 2024.
Accelerating Volvo's ZEV Strategy
Alastair Hayfield, senior research director at market intelligence firm Interact Analysis, pointed out that Volvo Group has aggressively pursued an electrification strategy across all lines of its business.
“This acquisition makes perfect sense as it will enable Volvo to 'go faster' with its electrification strategy and give it a battery manufacturing facility to support its U.S. operations,” he said in an email. “What is not clear is whether Proterra's agreements with other OEMs will remain.”
Proterra battery technology powers more than 20 commercial vehicle applications, from Class 3 cargo vans up to Class 8 semi-trucks, as well as off-highway equipment in the U.S., European, and Asia-Pacific markets.
The transaction between Proterra Inc. and Proterra Operating Company as sellers and Volvo is subject to approval by the bankruptcy court in the U.S. Closing also will be subject to merger clearance and certain other conditions.