Sweden's Volta files for bankruptcy
Another pioneer of electric LCVs hits the skids
Swedish electric truck maker Volta Trucks has filed for bankruptcy in Sweden, while the main trading entity of the group, Volta Trucks Limited, will shortly file for administration in the UK.
The firm’s battery supplier Proterra sought Chapter 11 protection in the US in early August, with a knock-on effect on Volta’s manufacturing plans, reducing the volume of vehicles that it was able to produce.
“The uncertainty with our battery supplier also negatively affected our ability to raise sufficient capital in an already challenging capital-raising environment for electric vehicle players,” the firm says.
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Volta Trucks was founded in 2019 in Sweden. It created the world’s first purpose built 16-tonne all-electric truck, the Volta Zero, which it had piloted in five European countries.
During 2022 the company saw its staff grow by 200 pc to nearly 700 employees as it looked to expand.
In November 2022, it announced a successful extension of its Series C funding round, taking the total amount raised by the company to over €360mn ($380mn) to date. The firm had been targeting an IPO in 2024.
Other large electric vehicle makers have struggled to maintain cash reserves as they grow their businesses in a competitive marketplace.
Earlier this year, UK-based EV developer Arrival, which is developing an all-electric passenger bus as well as various other vehicles, raised $300mn in equity financing as it sought to restructure its business ahead of a full scale-up of its electric vans and buses.
Last year, Arrival also shifted its manufacturing to Georgia in the US in an attempt to minimise losses after revealing it did not have enough in cash reserves to launch its products.
And Proterra itself also found itself spending its cash reserves too quickly as it attempted to scale its business around the word, noting that different regions have different requirements.
“The manufacturing process requires much customisation, which makes scaling the business difficult and requires an extensive amount of working capital,” the firm said in its bankruptcy filing.
One issue that makers of larger vehicles such as e-buses or e-trucks face is that orders tend to be lumpier than passenger vehicles, meaning potentially longer periods when little or no cash is coming through the door compared to start-ups selling cars.
And they also are targeting commercial buyers to a greater extent than passenger vehicle makers — other than light vans, their consumers are operators of fleets of trucks and lorries. Start-ups then have to compete against legacy manufacturers with years of existing relationships with those making the buying decisions at these organisations, making their task of displacing ICE incumbents even harder.