This has been a pretty trucked-up week on two counts: on the one hand, the depressing and out-of-the-blue news that VOLTA Trucks has gone into administration, and on the other, the collapse of the trucking tech company, CONVOY.
Two weeks ago, Volta Trucks was encouraging people to send in photos of the world's first purpose-built 16-ton electric truck - the Volta Zero - if they spotted it on the streets. Since 18OCT23, however, the entire company website offers just one message: “On 18 October 2023, Andrea Jakes, Mark Firmin and Joanne Hewitt-Schembri of Alvarez & Marsal Europe LLP were appointed as Joint Administrators ("Joint Administrators") of Volta Trucks Limited ("the Company"). The Joint Administrators have been appointed to manage the Company's affairs, business, and property. The Joint Administrators act as agents of the Company without personal liability.” Not even the original statement of the Volta Truck Board, published that day, can be accessed anymore. It had pointed to the bankruptcy of its battery provider, Proterra, in AUG23, as the main cause for its own bankruptcy.
A sad, sad day
Devastating news, so unexpected, and one that will have a knock-on effect on a great many individuals, if a buyer is not found to take over. LinkedIn was immediately full of supporters expressing their sympathy. Not surprisingly, since the truck design is not only beautiful and far more beneficial for the environment, but also its large cockpit windows provide for greater safety on the roads. “Absolute tragedy!”, “’Heartbreaking news!”, “So sad!”, “What a shame!” were the main messages, with posters urging governments to step in and protect EV startups out of a duty to the environment, and calling for the right investors, funding, or mergers to keep what many see as a compelling business story worth keeping alive. “The world needs companies like Volta,” was one such sentiment, echoed in variations down the page by people from all corners of the world.
Grateful and aware
All the support did not go unnoticed. Volta responded on LinkedIn with: “The Industry has outpoured support to our Volta staff team at this difficult time, of which we are all very grateful. We have accomplished a great deal from a standing start in 2019, revolutionizing commercial vehicle operations for a sustainable future.
However, like all scale-ups in the EV manufacturing sector, we have faced challenges along the way. With deep and sincere regret, the Board has therefore taken the difficult decision to take steps to file for bankruptcy proceedings in Sweden. The main trading entity of the Group, Volta Trucks Limited, will shortly file for administration in England. The Board is fully aware of the significant impact this will have on the organization’s dedicated workforce, as well as customers and partners. They would like to sincerely thank the Volta Trucks team and are incredibly proud of their pioneering work to deliver such an innovative zero-emission commercial vehicle.
Signing out, but the transport industry must continue to push towards cleaner sector.”
What now, DB Schenker?
One such affected partner – and one that this time last year, had already completed its first on-road test phase of the full-electric Volta Zero, and just three weeks ago, opened a new terminal in a central location at Bergen Flesland Airport, Norway, in preparation for its 1,500-strong fleet of Volta Zero trucks, is DB Schenker. The partnership between DB Schenker and Volta Trucks goes back almost to the start-up’s beginnings, with DB Schenker then placing the largest order of medium-duty electric trucks in Europe to date in 2021 (CFG reported: https://www.cargoforwarder.eu/2021/12/05/short-shots/ ). Of those 1,500, 150 were due to go into operation this year (CFG reported: https://www.cargoforwarder.eu/2023/03/12/db-schenker-focuses-on-e-mobility/ ). There has been no official statement on what now happens to DB Schenker’s EV strategy for Europe. Similarly, refrigerated truck rental company, Petit Forestier, which was due to take delivery of the first of its fleet of 1,000 Volta Zeros in NOV23, has remained stumm as to what happens now. Both companies are likely waiting to see if an investor can be found to take over before they embark on any Plan B.
And what about Austria?
While Volta mentioned filing for administration in Sweden and UK, nothing was said about its production location in Austria. Steyr in Austria had been chosen as the production location in APR23. 14,000 trucks per year were eventually due to be produced there, with a local workforce of 700, and another 2000 in the supply chain. At the time of the bankruptcy announcement, the Austrian location was just 30 days away from going in production, and around 100 people are currently employed for the Volta project. “We are in close contact with our customer, Volta. However, as is usual in such cases, we will have to wait for the insolvency administrator's further course of action in order to be able to assess the situation accurately,” was Florian Mayrhofer’s comment as Steyr Automotive Board Member.
In total, Volta has pending orders for 5,000 trucks, so the pressure to find a buyer, is on.
No joy for Convoy
A day after Volta’s bankruptcy announcement, a similar letter was sent by CEO, Dan Lewis, to all his employees at Convoy. The Seattle-based trucking tech company which had been founded in 2015, has officially collapsed – though no external statement is published to that effect on its website or LinkedIn page. The company-internal letter illustrated the efforts that had been put in during the past four months to find an investor but pointed to the “massive freight recession and a contraction in the capital markets. This combination ultimately crushed our progress at the same time that it was crushing our logical strategic acquirer - it was the perfect storm,” as the reasons for the failure to garner financial interest. “We were running up the down escalator…. and it kept speeding up,”
Despite counting Bill Gates and Jeff Bezos amongst its investors and having raised USD 260 million at a USD 3.8 billion valuation early last year, Convoy had more recently reduced its workforce from 1,500 to 500 as it struggled to properly set itself apart from similar truck-matching solutions in the market.
Nevertheless, “the work you’ve all done will leave its mark on the freight industry forever. This industry needs to modernize. Shippers want it, carriers want it, and the market wants it. We still believe that this will be the future for this industry,” Lewis forecasted, and sang praises and thanks to his staff, signing off with “#TruckYeah”.
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