Scania CEO says committed to Northvolt despite cutbacks, delivery issues

HANOVER, Germany (Reuters) - Scania owner Traton is committed to using Sweden's Northvolt as the truckmaker's single battery supplier despite recent production and delivery problems, its CEO said on Monday.

Scania had to postpone a ramp-up of its battery-electric truck production by a year and delay deliveries to customers due to the troubles at Northvolt, Europe's leading battery supplier.

"The worst thing was that we had to go back to all the customers and say 'Sorry, we cannot deliver,'" Christian Levin, who is CEO of both Traton and Scania, told Reuters at the IAA Transportation truck show in Hanover.

Volkswagen is one of Northvolt's largest investors and is the parent company of Traton.

Asked about the setbacks at Northvolt, which unexpectedly decided to shrink operations and cut jobs, Levin said Traton is in close contact with the supplier and trying to support it but declined to comment on Traton's contractual relationship.

Scania told Swedish newspaper Svenska Dagbladet in May that it was unable to ship thousands of electric trucks last year due to Northvolt's problems, underscoring a widespread issue.

But now Traton and Northvolt have come up with a new plan for Scania that is keeping up with customers' needs, Levin said, adding it is now delivering batteries in line with the plan.

Northvolt and Volkswagen entered a $14 billion supply agreement in 2021 spanning the next 10 years.

A Volkswagen spokesperson declined to comment on its investments. Northvolt was not available for comment.

The battery maker, which has $15 billion in equity and debt financing from institutions including Goldman Sachs and BlackRock, filings show, has been trying to raise more cash to fund its ramp-up.

Scania plans that half of its vehicle sales will come from electric trucks by 2030. It assembles batteries in a new assembly plant in its hometown of Sodertalje using supplies from Northvolt.

(Reporting by Ilona Wissenbach, Christina Amann, and Marie Mannes, writing by Andrey Sychev, editing by Miranda Murray and Alexander Smith)