Volvo Group to buy Proterra battery business for $210M
Swedish truck company Volvo Group plans to acquire the battery business of bankrupt electric vehicle company Proterra for $210 million.
Why it matters: The outcome for Proterra's fast-growing battery unit highlights both the expanding global market for electric trucks and buses but also the challenges ahead for EV manufacturing.
Details: On Friday Volvo Group said it won an auction for Proterra Powered, which is Proterra's division that makes battery systems for electric trucks, buses and vans for commercial customers.
- The division was one of three business lines that Proterra put up for sale through bankruptcy proceedings in August.
- The other two divisions, Proterra Energy (which makes charging gear) and Proterra Transit (which makes electric transit buses for transit agencies) are scheduled to have an auction later today.
- The deal is subject to the bankruptcy court's approval, as well as regulatory approvals and closing conditions.
Catch up quick: The almost 20-year-old company based in Burlingame, Calif. filed for bankruptcy protection after its electric transit bus unit faced huge capital needs and struggled with supply chain issues and burdensome contracts.
- Proterra leadership said in filings that potential investors expressed interest in purchasing the company's charging and battery business but were scared off by the transit unit.
- Just two years before the bankruptcy, in June 2021, Proterra went public via a SPAC with ArcLight in a deal that was once valued at $1.6 billion.
- Proterra Powered was the fastest growing of Proterra's business lines, and the unit had more than a dozen OEMs partners and delivered battery systems for more than 1,600 vehicles.
Big picture: The Volvo Group acquisition shows how global automakers are showing increasing interest in commercial electric truck and bus markets.
- Companies that buy trucks and buses are being pushed to buy electric versions by both regulations and net zero goals.
- But the $210 million winning auction bid is just a portion of Proterra Powered's revenue-generating potential. For the year 2022, Proterra Powered and Proterra Energy generated collective revenue of $118.28 million.
What's next: We'll be watching for the results of the auction of Proterra Energy and Proterra Transit.