Volta Trucks and Cummins Inc. don’t have much in common. The former is a Swedish startup that has only been around for five years, and the latter is an American diesel engine powerhouse whose history dates back more than a century. Their commonality – both companies want to extend into the rapidly expanding market for electric trucks.
Stockholm-based Volta Trucks and Indiana-based Cummins Inc. target different segments of the market. Volta is gearing up to launch its own electric truck, while Cummins aims to be a supplier of a full range of auto parts to electric truck manufacturers.
The common denominator is that both companies see massive sales opportunities in a market that is growing in double-digits thanks to government and corporate demand for electric-powered vehicles.
The global electric truck market was valued at $22.63 billion in 2021, according to data from Mordor Intelligence. It’s projected to reach $57.67 billion by 2027 – a compounded annual growth rate of 14.30%. Europe and North America should hold significant shares of the worldwide market, driven by growth in industrialization, urbanization and government backing of eco-friendly vehicles over fuel-based vehicles.
Volta Trucks looks to make a splash in Europe with its Volta Zero electric truck, slated to start production later this year. The company was co-founded in 2017 by Carl-Magnus Norden and Kjell Walöen to decarbonize last-mile logistics and make urban environments
safer and more sustainable. Volta specializes in Heavy Goods Vehicles (HGVs) designed for middle- and last-mile delivery in densely populated urban centers.
Volta Trucks has raised more than $300 million since five years ago. The Series C funding round was led by hedge fund Luxor Capital, which had previously invested in Volta. The money will be used to bring Volta Zero to market. Prototypes will be delivered to customers in mid-2022, with series production starting later in the year.
“[The funding round] gives us the financial runway to deliver on all our goals as we transition from a start-up to a manufacturer of full-electric trucks,” Volta Trucks CEO Essa Al-Saleh said in a statement.
Cummins comes to the electric truck market from a vastly different background. It was founded in 1919 and today ranks as one of the world’s leading manufacturers of diesel engines, with roughly $20 billion in annual revenue and about 58,000 employees. Cummins makes hydrogen fuel cells and electric motors that produce no carbon dioxide or greenhouse gases in the EV sector.
The company recently dipped its toes into other market segments when it signed a deal to acquire Meritor, a truck parts supplier, for $3.7 billion. The buyout adds transmissions, brakes, and axles to Cummins’ existing lineup of electric truck products. It also allows electric truck manufacturers to source nearly their entire drivetrain from a single company.
Cummins CEO Tom Linebarger called the Meritor acquisition an “important milestone” for his company.
“Meritor is an industry leader, and the addition of their complementary strengths will help us address one of the most critical technology challenges of our age: developing economically viable zero-carbon solutions for commercial and industrial applications,” Linebarger said in a press release.
Meritor’s board of directors unanimously approved the deal, subject to closing conditions, regulatory approval, and Meritor shareholder approval. It is expected to close by the end of the year.