Castrosua has already entered similar agreements with BYD and Scania (with e-bus model unveiled at Busworld), while Volvo Buses has also entered a coach-building partnership with Sunsundegui, while for e-buses the Swedish group turned so far to MCV.

Volvo – Castrosua for the Spanish market

Under the agreement, Castrosua will body Volvo’s BZL electric bus chassis with its Nelec body. While Castrosua has previously constructed bodies on Volvo chassis independently, this agreement signifies a deeper level of cooperation between the two companies. The first buses resulting from this collaboration are anticipated to undergo real-world testing and marketing in the second quarter of the upcoming year, with initial deliveries scheduled for the end of 2024.

Jaime Verdú, CEO of Volvo Buses in Spain, and Castrosua’s CEO Beatriz Castro. The collaboration extends beyond a mere manufacturing partnership; it embodies a shared vision for advancing cleaner and more efficient public transport solutions.

Jaime Verdú, CEO of Volvo Buses in Spain, is quoted as saying: “Together we want to offer mobility solutions that meet the highest standards of quality, sustainability, and performance.”

“We are confident that our collaboration with Volvo Buses will allow us to offer the market a very interesting new option,” comments Castrosua’s CEO Beatriz Castro

“As we celebrate our 75th anniversary, this collaboration with Volvo Buses marks a milestone in our commitment to innovation and sustainable mobility,” affirms Castro.

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The Volvo BZL Electric will run on two routes in Curitiba, Brazil, which connect dozens of neighbourhoods, transporting 135,000 passengers daily and integrating with the city’s BRT in several terminals, according to the information released by the Swedish OEM. Further demonstrations of the Volvo BZL Electric will follow in São Paulo, Bogotá, Colombia and Santiago, Chile.

Volvo electric bus demonstration in Latin America

The demonstration in Curitiba is meeting the requirements of URBS, the public transport authority overseeing the acquisition of electric buses for the city from 2024. During the demonstration, important assessments of key factors, such as energy consumption, autonomy, noise level and vehicle performance within the city’s topography will be carried out.

The Volvo BZL Electric 4×2 chassis is intended for urban and metropolitan operations, and it is equipped with 94kWh batteries (it is unclear if the bus is equipped for fast charging through pantograph, as such battery capacity is quite limited compared to the average over 300 kWh on the same length). The Curitiba demonstration vehicle has four batteries, it is powered by a 200kW electric motor, and for the demonstration it is built in accordance with URBS requirements for electric buses. The vehicle is 12.6 meters long and carries up to 80 passengers. It will operate throughout the day and charge at night.

The vehicle features Zone Management to automatically lower speed in sensitive locations, such as schools, indoor terminals and busy urban areas. When it was first introduced on bi-articulated vehicles in Curitiba in 2018, it reduced accidents by 50% in the first year, Volvo Buses says.

Volvo electric buses: next stop LATAM

“These electric buses represent another step on our electrification journey. We have a zero vision – zero emissions, zero noise, zero accidents and zero congestion – and we are fully committed to creating sustainable people transport solutions,” says André Marques, President of Volvo Buses in Latin America.

“The performance of Volvo electric buses in Europe and in several countries on other continents is very positive. Now we are going to show that this performance will be repeated in the challenging conditions we have in Latin America,” says Alexandre Selski, Director of Electromobility at Volvo Buses in Latin America.

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Production is expected to start in 2024 and the first electric buses with chassis from Volvo and bodies from MCV will be on the market in 2025.

Volvo – MCV deal for e-bus production

The agreement with MCV is the next step in Volvo Buses’ new business model in Europe, that includes the decision  to cease the production of complete buses, both urban and coach, in Europe. Earlier, Volvo Buses had signed letters of intent with MCV for the manufacture of bodies for city and intercity buses, and with Sunsundegui for tourist buses.

Volvo Buses communicates that “during autumn, Volvo Buses will continue planning together with MCV with the aim of starting production in 2024. Customers should be able to place orders in the last quarter of 2023, which means deliveries should be possible in the first quarter of 2025”.

“By completing the agreement with MCV, they can now manufacture our bodies so that we can offer customers in Europe a complete range of Volvo’s city and intercity buses in the premium segment. MCV is a perfect partner with the skills and capacity to meet the high demands of our European customers,” says Dan Pettersson, Senior Vice President at Volvo Buses.

Under the new business model in Europe and the agreement with MCV, Volvo Buses will continue to be the point of contact for customers regarding spare parts and services, both for new offers and for customers who already have Volvo buses in their fleet.

“Our business model means that we have close collaboration with some of the world’s leading bodybuilders, which allows us to combine our expertise in each area. It improves our ability to develop and adapt solutions to meet customers’ needs now and into the future,” says Dan Pettersson.

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In March 2023 Nova Bus secured in Canada the largest-ever order of electric buses in North America.

By the way, on Tuesday 27th June (next week) we’ll be broadcasting a VideoSpotlight focusing on “Electrification of bus fleets in the Americas”: registrations are OPEN.

Change in business models: from Europe to North America

The change in business model and strategic focus by Nova Bus adds to the previously announced decision by its parent company, Volvo Buses, to cease the production of complete buses, both urban and coach, in Europe and instead rely on collaborations with bodybuilders (MCV for e-buses, Sunsundegui for coaches). A similar strategy has been adopted by Scania (“We believe that for us to remain a key player in the market over time, we need to focus. This will also give us resources to be more adaptive and flexible to the needs and the markets, being more attentive to what’s happening”, told Scania Senior Vice President Head of Bus and Coach Johanna Salomonsson Lind in an interview with Sustainable Bus).

The decision comes in a time where investments on public transport and electric buses is gaining momentum in the country. North America is projected to be the fastest-growing market during the forecast period, study says.

Nova Bus exits USA market

The manufacturer, part of Volvo Buses, states: “Nova Bus will work closely with employees, customers, and suppliers as bus operations in the Plattsburgh facility are planned to continue until the first quarter of 2025. Nova Bus will continue to support its US customers’ parts and service needs”.

The extent of the impact this decision will have on the Canadian organizational structure “remains under analysis by Nova Bus and will continue to be defined as the restructuring takes place over the next 24 months”, it is also stated.

“This decision is questionable not least because in the USA the Biden administration’s massive IRA investment programme would make a production plant in the USA indispensable (“Buy America Act”) and therefore many European manufacturers such as Van Hool, Ebusco and others are pushing into the US market”, is the comment of German specialized media Busblickpunkt.

Nova Bus: financial losses over the years

“The strategic decision to end bus production in the US by 2025 was made after evaluating its profitability, which was experiencing continued financial losses over the years,” says Anna Westerberg, Chair of the Nova Bus Board of Directors.

“Although this strategic decision is a difficult one, by changing our business model with a focus on Canada, we will improve profitability and secure our long-term competitiveness,” adds Ralph Acs, President of Nova Bus. He also says: “We will do the utmost to support our employees, many of whom have been employed for numerous years. We will work together with our sister Volvo companies, surrounding businesses, local authorities, and communities to support our people in finding new employment opportunities”.

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A couple years ago Volvo Buses tested a 7900 Electric in the country. In April 2023 the group announced that the Egyptian company MCV (Manufacturing Commercial Vehicles) will produce bodyworks for its electric buses for the European market, as a consequence of a change in the business model for the old continent, involving both city buses and coaches.

Locally manufactured Volvo e-bus for Mexico

The bus boasts a low-floor body with wide doors and is available in lengths ranging from 9.7 to 13 meters. Depending on the length, it can be equipped with a battery pack ranging from 280 to 470 kWh, providing a range of up to 400 km, according to the OEM. Inside, the bus offers spacious interiors and incorporates Volvo’s latest generation of active and predictive safety systems, including speed limit adjustments and pedestrian detection.

The Luminus is produced at Volvo Buses’ manufacturing plant in Tultitlan, a facility with extensive experience in the Mexican market. The brand has a strong presence and is among the top-selling bus brands in the country. Volvo offers tailored solutions to meet the specific needs of Mexican customers, providing added value through comprehensive services.

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Volvo Buses has announced in March its plans to stop production of complete buses (and e-buses) in Europe. In April 2023, Volvo Buses signed a Letter of Intent with MCV to expand their partnership, taking the formula adopted in the UK to produce electric buses for the wider European market, in the city and intercity segments.

However, the UK has been since the beginning one of the market addressed with the new BZL electric bus chassis.

MCV – Volvo electric buses for London

Stagecoach will receive 170 Volvo BZL Electric buses for operation in Stockport starting from summer 2024. The fleet will consist of 150 double-decker and 20 single-decker buses featuring MCV bodywork built to Transport for Manchester specifications. Additionally, Stagecoach has ordered 19 Volvo BZL Electric single-decker buses for operation in London, to be delivered between late 2023 and early 2024.

With these orders, Stagecoach’s investment in Volvo BZL Electric buses has reached 244 vehicles, making it Volvo’s largest electric bus customer so far, the manufacturer says. In March, Stagecoach had received 25 single-decker Volvo BZL Electrics for operation in Scotland, and 30 double-deckers are scheduled to enter service in Cambridge in May.

The Volvo BZL Electric is available in the UK with MCV bodywork that can be customized to meet the specific requirements of local fleets. The buses are offered in lengths ranging from 9.7m to 12.9m and feature either single or twin door configurations, with a low-entry full low floor option. The buses provide a quiet and comfortable experience for passengers and a calm and quiet workspace for drivers.

Volvo Buses – Stagecoach partnership gets intense

Anna Westerberg, President of Volvo Buses, said, “The strengthening of this partnership illustrates how our product and expertise can support public transport networks to reduce emissions. We offer the world’s most responsible electric bus systems, and I’m pleased that Stagecoach’s passengers are amongst the first in the UK to experience Volvo electric buses first-hand.”

Sam Greer, Engineering Director for Stagecoach, commented, “We’re excited to be announcing our largest electric vehicle order to date, which will be a major step forward in improving air quality locally. This builds further on the investment being made by Stagecoach across the country to support the transition to a zero-emission bus fleet.”

Domenico Bondi, Managing Director of Volvo Bus UK & Ireland, said, “Our industry is transforming to electromobility, and that’s why we’re focusing on making our processes, from material sourcing and manufacture to operation and recycling, as sustainable, safe, and reliable as possible.”

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The decision comes after years of losses in the European market, and Volvo Buses plans to implement a new model already successful in other markets.

Our business in Europe has been loss-making for years. With this business model, that we already today apply successfully in many markets, we will improve profitability and secure our long-term competitiveness

Anna Westerberg, President of Volvo Buses

Volvo Buses closes Wroclaw factory

According to Anna Westerberg, President of Volvo Buses, the company will continue to have the customer interface, offer a complete range of buses and coaches in partnership with selected external bodybuilders, and provide strong uptime service and a high standard of safety and quality. This will result in a leaner structure, improved flexibility, and the ability to better meet market requirements and customer demands.

Volvo Buses will continue bodybuilding manufacturing in Wroclaw until the first quarter of 2024, with orders for complete buses and coaches in Europe being delivered from the Wroclaw plant as planned. The company will also continue to give full service and support to both existing and new fleet offerings.

Volvo Buses sells Wroclaw plant to Vargas

As part of the transition, Volvo Buses has signed a Letter of Intent (LoI) with Vargas Holding, which will divest Volvo Buses’ premises in Wroclaw and re-purpose the facility for future growth. The LoI includes Vargas Holding’s aim to offer employment to parts of the Volvo employees, some as early as the third quarter of 2023.

The decision to end production of complete buses and coaches will affect around 1,600 positions at Volvo Buses, with approximately 1,500 of these being based in Wroclaw. Volvo Buses says it has initiated discussions with respective unions and will work with Vargas Holding, local authorities, and other parties to support affected employees in finding new employment opportunities.

Implementation of the new business model is expected to temporarily impact revenues in Europe during the transition period in 2024 and 2025. A restructuring provision of approximately SEK 1.3 billion (116 millions euros) will negatively impact operating income in the first quarter of 2023. The expected negative cash flow effect is estimated to be approximately SEK 1.0 billion, with the majority impacting 2024. Once the transition is completed, the move to the new business model is expected to make the European bus operation profitable.

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The investment highlights the companies’ shared commitment to sustainable bus fleets and more efficient transportation operations, and reinforces the scalability of Optibus, which last month became the first unicorn company dedicated to public transportation. The number of cities using Optibus has more than doubled in the past year, growing to 1,000 cities in 26 countries across North and South America, EMEA, and Asia Pacific.

Volvo invests in Optibus

The investment was made by Volvo Group Venture Capital, the Corporate venture capital of Volvo Group. The move has “the aim to drive transformation through venture investments and to support collaborations between start-ups and the Volvo Group”, the companies say.

The bus market is transforming due to digitalization, electrification, and changes in business models. Advanced software solutions are key for cities and bus operators to take advantage of market developments. Optibus and Volvo Group will collaborate to create mutual strategic learnings and growth opportunities. 

Using optimization algorithms, artificial intelligence, and cloud computing, Optibus develops and provides an all-in-one software platform for digitalizing and optimizing the work processes involved in public transportation planning and management. The software streamlines business operations, improves passenger services, and supports a smooth transition to 100% electric bus fleets, the supplier says.

Volvo with Optibus for bus electrification

“Optibus offers a scalable SaaS solution and has doubled its revenue year over year. We are impressed by the founders, the team culture, and the company’s achievements. We believe the Volvo Group can add considerable strategic value to the continued development of the business,” says Christina Brinck, Investment Director, Volvo Group Venture Capital.

“The collaboration with Optibus will contribute to our efforts to support customers with more efficient and sustainable transport solutions,” says Anna Westerberg, President of Volvo Buses.

“We are honored to receive this strategic investment from Volvo to enable greener, more efficient public transportation operations through better software infrastructure. Between Volvo, as a global OEM with decades of auto industry expertise, and Optibus, as an agile, quickly scaling SaaS company, this relationship spurs the synergy needed to advance digitalization and more sustainable fleets,” said Amos Haggiag, CEO and co-founder of Optibus. 

Volvo Group has announced a strategic investment in Optibus (entity has not been released). Goal? “To advance bus electrification and the digitalization of the public transportation industry”, Optibus says in a press note. The investment supports key software infrastructure for achieving sustainable, digital bus operations 

The investment highlights the companies’ shared commitment to sustainable bus fleets and more efficient transportation operations, and reinforces the scalability of Optibus, which last month became the first unicorn company dedicated to public transportation. The number of cities using Optibus has more than doubled in the past year, growing to 1,000 cities in 26 countries across North and South America, EMEA, and Asia Pacific.

Volvo invests in Optibus

Volvo Group Venture Capital is the Corporate venture capital of Volvo Group and has “the aim to drive transformation through venture investments and to support collaborations between start-ups and the Volvo Group”, the companies say.

The bus market is transforming due to digitalization, electrification, and changes in business models. Advanced software solutions are key for cities and bus operators to take advantage of market developments. Optibus and Volvo Group will collaborate to create mutual strategic learnings and growth opportunities. 

Using optimization algorithms, artificial intelligence, and cloud computing, Optibus develops and provides an all-in-one software platform for digitalizing and optimizing the work processes involved in public transportation planning and management. The software streamlines business operations, improves passenger services, and supports a smooth transition to 100% electric bus fleets, the supplier says.

Volvo with Optibus for bus electrification

“Optibus offers a scalable SaaS solution and has doubled its revenue year over year. We are impressed by the founders, the team culture, and the company’s achievements. We believe the Volvo Group can add considerable strategic value to the continued development of the business,” says Christina Brinck, Investment Director, Volvo Group Venture Capital.

“The collaboration with Optibus will contribute to our efforts to support customers with more efficient and sustainable transport solutions,” says Anna Westerberg, President of Volvo Buses.

“We are honored to receive this strategic investment from Volvo to enable greener, more efficient public transportation operations through better software infrastructure. Between Volvo, as a global OEM with decades of auto industry expertise, and Optibus, as an agile, quickly scaling SaaS company, this relationship spurs the synergy needed to advance digitalization and more sustainable fleets,” said Amos Haggiag, CEO and co-founder of Optibus. 

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Volvo Buses launches Volvo Connect

In Volvo Connect all services are gathered in a user-friendly portal. With a single login, fleet managers can monitor performance, review fuel and energy efficiency and plan service and maintenance.

Volvo Connect includes fundamental services such as reports, real-time vehicle status, driving profile, a line-up of workshop services and it is also offering a unique geo fencing functionality, Zone Management, where the operator can limit speed in designated zones or only allow electric mode for hybrids.

New services and new functionality will be added continuously and integration with operators’ existing infrastructure is an important part, Volvo Buses stresses.

“By gathering services and information in a single portal we make it easier for our customers to improve on uptime, productivity and safety”, says Dan Pettersson, Senior Vice President at Volvo Buses. He adds: “We are convinced that joint development, with customers and with third-party developers, is the way forward”.

Anna Westerberg, President of Volvo Buses concludes: “Launching Volvo Connect is an important strategic move. It’s a move towards closer and smarter customer interaction and partnerships”.

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Now we see that the demand for e-buses is really increasing; we have been working on this since a few years and now it is really happening. We have high ambitions to grow our electric bus business in selected countries in Europe

Anna Westerberg, President of Volvo Buses

Anna Westerberg on Volvo BZL electric chassis

Ms. Anna Westerberg, may you draw a balance of 2021 in terms of market volumes? From Volvo Buses perspective, how is the situation evolving?

«The city bus segment is very much recovering in Europe and the rest of the world as well. When it comes to the coach segment, the recovery has been slow so far but we start to see that demand is coming back now as restrictions are lifted and societies are opening up again».

You just launched the electric chassis BZL. In the presentation, the markets of Mexico, Australia and UK were mentioned…

«These are three very important markets for Volvo Buses. We are already present in Europe with a complete electic bus solution, and now we are launching also the electric chassis to take our electromobility offering global».

You have been testing e-buses in Mexico and sold some in the UK. Now, what will happen? E-buses and chassis will be both sold in parallel on this markets?

«The UK is more a chassis market, we’ll be mostly selling chassis and working with partners. And the same will be valid in Mexico, where we have been piloting a complete e-bus and it has been a good experience to gain knowledge on the real operation in that environment».

Should we expect any new partnership with local bodybuilders?

«We have several bodybuilding partnership already in force, and we’ll continue with our partners also on the electric bus side».

Volvo Buses, e-buses in the Nordics and… ?

Volvo Buses has been among the first bus producer to take the way to a full electrification of its city bus range in 2013 already I guess. Anyhow, the market penetration is limited so far, with mostly nordic countries involved. Now that the electric bus market is ramping up in many other countries, let’s just mention Germany, is Volvo going to take into consideration an expansion on new markets?

«We are very strong in the Nordics, it’s part of our heritage. But we sell our electic city bus in several countries in Europe. Now we see that the demand is really increasing; as you say we have been working on this since a few years and now it is really happening. We have high ambitions to grow our electric bus business in selected countries in Europe».

We believe that battery electric will be the right technology for intercity segment. And then when we move to coach applications, we think some will be covered with battery electric, others will need battery-electric drives together with fuel cells

Anna Westerberg, President of Volvo Buses

You have been previously in charge of Volvo Connected Solutions. Which lessons from that experience are you bringing to the bus segment?

«Yes, within Volvo Group Connected Solutions we provide a connectivity platform and connected services to Volvo Group customers all over the world. When it comes to electromobility, we have services for charging, zone management as well as fleet management services and reporting. We are really into this industry transformation, which is driven by connectivity, electromobility and autonomous driving. I believe experience from my former job is very relevant in the bus industry, since connectivity is a key enabler for creating new services to better support our customers and also new business models».

Anna Westerberg: the amount of energy becomes our responsibility

Volvo Buses has recently announced that the company is now offering its useable energy commitment as a business solution for electric buses. May you be more specific on this subject?

«It’s a usable energy commitment. We saw that supporting our customers during their first step into e-mobility is key. What we do is work with customers, looking at the characteristics of their operations with electric buses (climate, number of passengers, topography…) and calculate what could be a sufficient energy amount required for the operations. Then we monitor the health and the state of batteries during the contract period, and we guarantee a certain amount of usable energy during that period. This becomes our responsibility. Battery replacement is included in the contract, and in this way we take care also of second life and recycling of batteries within our group».

It means you are offering a ‘warranty’ that the performances of the e-bus will keep up with the needs of the customer, and when performances lower, is the manufacturer to step in?

«Exactly: we take responsibility for that, as long as the criteria that we specify upfront with the customer have been followed».

Let’s put a focus on intercity buses: Volvo Buses is still commercializing Class II vehicles in some European countries. Now we see internal combustion engines buses will be less subsidized in many countries. Which technology are you targeting for the intercity segment?

«We believe that battery electric will be the right technology for this segment. And then when we move to coach applications, we think some will be covered with battery electric, others will need battery-electric drives together with fuel cells».

Anna Westerberg, Volvo and the future of fuel cell buses

A few years ago, the previous president of Volvo Buses said that at the moment the company was not taking into consideration hydrogen applications. Now, with Next Generation EU, lots of attention and investments are being focused on this technology. And Volvo as a group is investing in it, let’s mention the truck business. What about bus & coach? Are the cellcentric activities going to have consequences on the bus business?

«Technology is constantly developing and we are actively evaluating options for zero emission vehicles. For city and intercity applications, battery electric buses are a more viable solution but for longer journeys, especially for coaches, fuel cell electric powertrains will be a possible solution in the future. Through the cellcentric joint venture we will follow the development of fuel cell electric powertrains to see where it can be a good complement to battery electric buses».

Electromobility and digitalization,  plus maybe the covid stress test, are bringing a change in the industrial scenario. A couple competitors of yours are on their way to a spin off (Iveco and Daimler), others have joined forces and are restructuring activities (MAN), some newcomers are expected (Arrival, Hyzon….). How is a wide and aged group like Volvo dealing with these changes?

«Volvo group is one of the leading groups when it comes to transport and we are investing heavily in these areas. We are in a good position for the long run to lead the industry in this transformation towards a more sustainable future. When it comes to electromobility we have a plan for the full range going electric and accelerating on the services and solutions side».

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