Volvo Group won an auction for Proterra’s battery business with a bid of $210 million – this is what it’s like for the electric vehicle industry.
With the acquisition of the Proterra Powered unit, Volvo Group, based in Gothenburg, Sweden, is expected to gain a battery module and package development center in California and an assembly plant in South Carolina.
Proterra Powered’s current project is to convert medium and heavy-duty vehicles into electric vehicles. The Volvo Group manufactures trucks, buses and structural equipment.
The deal between Proterra, a California-based developer of batteries and vehicle platforms, and Volvo Group is, of course, subject to approval through the U. S. bankruptcy court. It is expected to be approved by the U. S. , but final approval is expected in early 2024.
Earlier this year, Proterra combined battery and bus production at its South Carolina plant, along with task cuts to cut costs. But supply chain and financing issues, as well as the investment needed to scale, eventually led Proterra to file for Chapter 11 bankruptcy. in August, as reported through Electrek.
Gareth Joyce, CEO of Proterra, said today:
We entered the Chapter 11 proceeding with a project to maximize the potential of our product lines. Today, we have taken a vital step towards this purpose for our Proterra Powered business.
Alastair Hayfield, senior director at market intelligence firm Interact Analysis, said in an email:
When Proterra filed for Chapter 11, we predicted that it would make sense for a former OEM to get the company and integrate it into their own.
What’s unclear is that Proterra’s agreements with other OEMs will be maintained. For example, Komatsu Construction had an agreement for the supply of batteries; At this level, it is not clear that this will continue.
Joyce says the sale is a way to “maximise the potential” of Proterra Powered, and now it will be Volvo Group that will take care of that instead of Proterra. And at the end of the day, while production and generation centers are wasted, that’s good news for the electric transition.
I asked my colleague Scooter Doll what he meant by Joyce, since we cover Proterra normally. He believes Joyce says the scenario is tough for small businesses and startups. Proterra may not do it alone, and the goal of the Proterra is to go bankrupt so that its generation can continue to be used intelligently.
This will drive Volvo Group’s battery-electric roadmap, and this sale is a lifeline to evolve electric car advertising and much more. In addition, you deserve to get advantages from the Volvo Group when it comes to the “made in the USA” battery requirement. “We are not going to be able to do anything in the Inflation Reduction Act for tax credits. So, it’s not the dream scenario for Proterra, but at the end of the day, this acquisition is a good outcome for both companies.
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Michelle Lewis is editor of Electrek and DroneDJ, 9to5Mac, and 9to5Google. He lives in White River Junction, Vermont. In the past he worked for Fast Company, The Guardian, News Deeply, Time and others. Message Michelle on Twitter or michelle@9to5mac. com. Check out her private blog.