After going into administration, Volta Trucks has risen from the ashes and now has a second chance to be a successful business. Essa Al-Saleh, CEO of Volta Commercial Vehicles and FFSC board member, spoke to Julia Swales, FFSC Advisory Board Manager and Senior Editor at Ti, about the transformation and rebuilding the business.
The Four Pillars
“Since we started phase two, in December last year, our mission has been to reassemble in a timely manner. The best way to think of that reassembly or re-emergence is in four pillars.
The first pillar is the people, getting them focused, aligned, committed to the reassembly, which is especially important when you go through a difficult step, like we had to go through. There’s a lot of post-traumatic stress disorder in a situation like that. We reassembled 140 people who are very passionate about getting electric, sustainable, reimagined, safe, productive vehicles into customers hands.
The second pillar really is around the customer and rebuilding relationships and trust – this is in fact an overarching theme. We want to get our customers, especially what I call our most advanced ones, committed to a sustainable future and willing to experiment, innovate and trial our trucks. At the top of that list is DB Schenker who are very committed to a sustainable, safe future in transportation and trucking.
DB Schenker are a lighthouse customer, meaning they engage in the development side. They test with us, they give us feedback. DB Schenker is in that segment of innovators, early adopters. They like to experiment. I think it’s going to give them a long-term advantage, because in a transition from one ecosystem to another you can’t just pick out 100 diesel trucks and replace them with 100 electric trucks, and assume you can operate the same way. It doesn’t work like that. You must rethink your profile, your driver training and requirements for driver skills, as well as when and where to refuel those trucks and some of the routes you use.
The other feature in our truck in particular, which is where I think we’re unique, is the design, the cab, the driver access, the visibility. We believe it provides around 10-15% more productive operations because of easy access. The driver gets in and out of the truck faster. With total visibility, they’re able to manoeuvre into cities or the warehouse dock much faster. So that’s an important opportunity to leverage and take advantage of.
The third pillar is the manufacturing and supply chain, one of the key things in the automotive sector – there’s a lot of investment in establishing manufacturing processes, but in order to be successful, you have to go all the way up the value chain to who your supplier is, what your suppliers need to do in terms of tooling, equipment, inventory, raw material to meet your requirements. They have to commit to their supply chain, and then you have to build a synchronous approach to all that, so in terms of how you forecast the volumes you want to commit to so that process is working.
And this is where understanding supply chain logistics and all the dynamics of it, from procurement sourcing all the way down to delivery to the customer, is critical in terms of people and the technology. So we’ve been working on that as a big part of it.
The fourth pillar is raising enough capital to support our capital needs to get back to market. We, as a business, raised around 40 million in the past 10 months enabling us to lay the foundation of our re-emergence. However there is more we need to raise for 2025 and beyond as we look to ramp up and execute on our pillars. And if we’re successful in that, then that positions us really well for the future. But we’re doing this in an environment where many companies have not succeeded, us included to the end of last year. But we’re thankful we have a second chance. Thanks to our shareholders and our key investors, thanks to our people and our partners, we have a second chance at it.
The Four Pivots
Our manufacturing is in Austria, with our manufacturing partner, Steyer Automotive, a very important partner to our return. Our supply base is a combination of Asia, Europe and US which is pretty broad.
The first pivot – we were building a truck that had the chassis and the box. I guess it was a good decision at the time, but proved to have a lot of complexity and cost. We pivoted to building just the chassis cab, and then we worked with many box suppliers who supported and understood our chassis frame and then they could attach their box or box design features to our chassis cab.
This opened up a lot of market opportunities, a lot of flexibility and lower cost for us. One particular box builder, Junge in Germany, was in the lead there. We’d exhibited with them at a conference in Germany.
The second pivot – we were building a business manufacturing trucks, but we also had a business within a business called our ‘Truck as a Service’, which was providing charging services, solutions, energy solutions, to educate our customers on what it takes to transition from internal combustion engine ecosystems to electric or battery electric ecosystems. We shrank that business considerably and now focus mainly on financing arrangements for our customers to purchase or finance their purchase from us. The reason we did that is there’s quite a few capable companies out there in the marketplace that we can partner up with, rather than have to build it in-house. So that’s another pivot that helped us lower our costs. We are focusing on what we do well, so the truck manufacturing, supply chain and the development of a great product.
The third pivot is we leaned in more into our service network, working more with partners. Before we had our own service centre, complimented with other service partners. That was a pragmatic choice because of cost and leveraging people who want to be part of the sustainable future.
The fourth pivot is just narrowing our focus on key markets in the short term. Germany, France, Sweden, UK, Austria, are our core first markets. We need to succeed and establish our presence with product and trucks in these markets. We want to earn the right to then expand beyond that.
Customer Trials and Costs
We’ve done 40 live customer trials so far, right now we have about 11 live pilots in operation. Some pilots are long term, so we give the customer six months to run the pilot operation because their order is big, or it could be as short as a one week pilot operation.
These are customers who’ve indicated how much they would like to order subject to a pilot. So they may want to order five trucks, but they say they need to test the truck for one week or two weeks, or whatever, the period of time we give it to them. They test it in operation, then they confirm their order.
You have to build trust and there’s a lot of anxiety around what it takes to drive an electric vehicle or electric truck, so you have to give them the confidence through testing a truck. That’s the one thing we do differently than I think, as our competitors. Our sales approach, our go to market strategy, is direct to sales channel. 99% of business is through engaging our customer base, mainly in the logistics, supply chain, parcel side.
Right now our truck with a 222 25 kilowatt hour battery capacity can give you up to 300 to 350, kilometre range. It all depends, obviously, on conditions and environment, but that’s been a consistent metric we’ve been seeing in our customer operations.
The price of the trucks is the same, it’s come down a little bit, but it’s roughly, for our chassis cab, around 250K per truck and that represents the upfront cost, but with the energy savings, the lower maintenance cost, the productivity you can get you, you save about 50% a year on operations on the total cost of owning a truck over a lifetime. This is around 15% savings. This is very significant.
Future Success
Success is not guaranteed, but it’s something that everybody in our ecosystem is very much passionate, committed and dedicated to. So that’s where we are today, and that leads us up to this point, and then I would say in the next three to six months, we should start seeing our first commercial orders going out to customers with a view towards ramping up our first series production next year, and then into expanding markets and other products into 2026, and 2037.
For the size and volume that we’re focused on right now, we do have pre orders and we’re looking to expand that once we have more capital in the business.
We’re working with the same partners, because they understand our business. You know, we have to agree the work with them through the lessons of the past and get back on the case. Obviously some of them make their own commitments to meet certain volumes and we need to deliver on those volumes as part of our mission and our goal. So that’s the key and how to make it a win-win for all of us.
They are hopeful and supportive of our return. It’s step by step – some of them had to work through some painful inventory that they had committed to, but the volumes come through because of our administration, so we had to work through that with them. Obviously, they had not been happy with some of the pain they had to take, but they’re very understanding, and that’s the mission. Now we need to look forward, rather than backward and by looking forward we commit to what kind of volumes we want to deliver on in 2025 therefore what orders want from them, how to manage that, when to manage that, what lead times are necessary.”
Source: Foundation for Future Supply Chain
Author: Julia Swales
