Volvo Group’s Nova Bus is ending bus production in the US market; the company has decided to close its Plattsburgh manufacturing and delivery facility by 2025. Production in North America will be in its Canadian facilities located in Saint-Eustache and Saint-François-du-Lac (Québec) and Nova Bus will continue its successful Canadian business, where it is the market leader.
Nova Bus manufactures the LFS line of buses, including diesel, hybrid, natural gas and all-electric powertrains. At the end of May, the Toronto Transit Commission (TTC) awarded Nova a base order of 124 LFSe+ electric buses, with a potential additional order of 12 buses and up to 405 units in option. The new LFSe+ offers modular battery options capable of storing up to 564 kWh.
The buses from the base order will be delivered over a two-year period starting in 2024. This will be the first order of Nova Bus LFSe+ buses by the TTC. In addition, the order also includes an adoption process for other agencies in Ontario to enter into their own agreements with Nova Bus for up to 550 buses over four years.
Over the past ten years, Nova Bus has delivered more than 1,300 buses to the TTC, including hybrid-electric buses. With this new order, the all-electric LFSe+ will support the bus fleet electrification efforts of the TTC, which are part of its commitment to be 50% zero emissions by 2030 and 100% zero emissions by 2040 or sooner.
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.—Anna Westerberg, Chair of the Nova Bus Board of Directors
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 decision to end bus production in the US and focus on Canada will gradually affect full time positions at Nova Bus, by 2025. 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.
The restructuring will not have a material impact on Volvo Group revenues. When completed, the restructuring is expected to make the Nova Bus operation profitable.
A restructuring provision of SEK 1.3 billion (US$121 million) will negatively impact the Volvo Group’s operating income in the second quarter of 2023.