Sweden's Volta Trucks zooms back after bankruptcy and targets Gulf expansion

Company is looking to raise $21.6m in the next couple of months, its chief executive says

Volta Zero, Volta Trucks' fully electric truck. Photo: Volta Trucks

Swedish electric lorry developer Volta Trucks seemed unstoppable last year.

The company raised €460 million ($498 million) from investors and invested the amount into its business to help meet orders for around 5,000 lorries.

Riding high on this momentum, Volta was in the midst of raising another €250 million when disaster struck. Its main battery supplier, Proterra, filed for bankruptcy, abruptly halting Volta's efforts to secure new funding and throwing its growth plans into disarray.

“As a result of that, we had to completely restructure, reorganise and pivot the business through an administration process that we went through in October last year,” Essa Al Saleh, the chief executive of Volta Trucks, told The National in an interview.

Following the restructuring, the UK business and assets of Volta Trucks were bought by Luxor Capital, which was already a major shareholder in the company.

Fast-forward to now, and Volta Trucks is sitting on a modest order book of 50 lorries for 2024.

The company's previous orders were cancelled with the termination of the previous entity.

However, the revamped Volta Trucks is re-engaging with its previous clients to supply lorries to them “as soon as possible”, Mr Al Saleh said.

“In some cases, where we received a small deposit against the lorries, we have pledged to prioritise such customers and respect the deposits they have made in the past,” he added.

The company has raised about €40 million since emerging from bankruptcy and is seeking €20 million in additional funds in the “next couple of months”.

Electric lorries currently make up a small segment within the larger EV market, which is experiencing a slight slowdown after years of rapid growth.

Essa Al Saleh, the chief executive of Volta Trucks. Photo: Volta Trucks

Sales of electric lorries rose by 35 per cent in 2023, with total sales exceeding those of electric buses for the first time, reaching about 54,000, according to the International Energy Agency.

China is the leading market for electric lorries, accounting for 70 per cent of global sales last year, down from 85 per cent in 2022, the Paris-based agency said in a report this year.

Meanwhile, in Europe, electric lorry sales increased almost threefold in 2023, reaching more than 10,000.

Mr Al Saleh said that Volta Trucks plans to expand its presence in Europe, while launching its lorries in the Gulf region, where the electric vehicle (EV) industry is getting a boost from government-led economic diversification efforts.

The company has been engaging in talks with potential customers in the GCC, as well as strategic partners who might be interested in distributing and assembling its lorries and financial investors, he added.

“We would likely have a few lorries in this market by the end of this year to test, so that we can upgrade and update the product to meet the GCC’s requirements,” Mr Al Saleh said.

“Assuming things play out as expected, our products should be ready for market by around the third quarter of next year,” he added.

The UAE and Saudi Arabia have been making significant investments in EV infrastructure as part of their efforts to achieve net zero emissions in the next few decades.

In the Emirates, EVs could account for up to 25 per cent of all new passenger cars and light commercial vehicle sales by 2035 amid the country's decarbonisation efforts, a PwC report said in June.

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The company’s main product is the Volta Zero, a fully electric lorry with 16-tonne and 18-tonne versions.

Its key customers include food wholesaler Metro and logistics company DB Schenker in Germany, Mr Al Saleh said.

The company's pipeline also includes customers at different stages of their order cycle, with more than 200 potential opportunities that could result in 800 to 1,000 lorry orders in 2025.

Battery issues

Proterra, a company based in California, filed for bankruptcy last year due to “macroeconomic headwinds”, such as inflation and supply chain problems, which rendered its contracts unprofitable.

However, the company is now back supplying batteries to customers after being bought out by Sweden’s Volvo in a $210 million deal earlier this year.

“We recently signed an updated term sheet with [Proterra] towards securing our battery capacity for 2025 and beyond,” Mr Al Saleh said.

Most manufacturers use only one source for batteries for a specific model due to the complexity of integrating and maintaining multiple batteries on a single platform, the Volta Trucks chief said.

“We continue to re-engage our current supply base in order to successfully and quickly restart the production of the Volta Zero, including our battery supply.”