Investment in Volvo's fuel-cell technology to create 100 new positions

Investment in Volvo's fuel-cell technology to create 100 new positions

In partnership with international corporations Midroc and OCAS, the Swedish
Energy Agency and the Volvo Group are investing SEK 200 M in Volvo's development
of fuel cells. The investment will create around 100 new positions in the
Gothenburg region within the next three years.

To accelerate the introduction of fuel cells into the market, the Volvo Group,
through its company Volvo Technology Transfer, will receive investment from the
companies Midroc New Technology and OCAS, as well as from the Swedish Energy
Agency. The parties make a joint investment of SEK 200 M in Powercell Sweden AB
in Gothenburg. Powercell Sweden is currently owned by Volvo Technology Transfer
but following the investment, Volvo will be a minority owner. 

In the autumn of 2009, Powercell Sweden will need to hire around 60 people in an
entirely new plant in the Gothenburg region. Per Wassén, who is Investment
Director at Volvo Technology Transfer and chairman of Powercell Sweden AB,
foresees that the company will create around 100 new jobs within the next three
years. 

“We are immediately going to start hiring qualified people for production,
product development, marketing and sales”, says Per Wassén. 

A fuel cell resembles a small battery. It is charged with hydrogen gas and
converts this into electricity, water and carbon dioxide through a chemical
reaction. The areas of use can be power supply units for households, trucks,
boats, radio masts in remote locations and electric hybrid vehicles. Compared
with normal diesel or gas-powered engines, fuel cells produce significantly less
carbon dioxide and no emissions at all of particulates and nitrogen oxides. In
addition, they are more efficient, smaller and lighter.  

“I am immensely proud that we are building this company on a technology that has
been developed by Volvo for 15 years”, says Per Ekdunge, CEO of Powercell
Sweden.

The company Powercell Sweden AB is based on two patented components: a fuel
converter (reformer) and a PEM fuel cell - the type of fuel cell most often used
in transport applications. The fuel converter produces hydrogen gas from bio
fuels such as ethanol, DME (Dimethyl ether), biogas, methanol and biodiesel, but
also from regular diesel or gasoline. The PEM fuel cell then converts the
hydrogen gas into electricity. 

“Thanks to our reformer technology we are now ready to start our production
without having to wait for an infrastructure for the distribution of hydrogen
gas. This is truly a major step in the development of fuel cells”, says Per
Wassén.

Volvo Technology Transfer is a subsidiary of the Volvo Group. Volvo Technology
Transfer develops and supports new business that is relevant to the Volvo Group.
 This comprises investing in companies and projects that are of strategic,
technical and commercial interest. 

Midroc New Technology, a part of Midroc Europe, develops and invests in future
technologies within Clean Tech and BioMed.  Midroc is owned by Mohammed H.
Al-Amoudi who among other companies owns Preem Petroleum, Swedish Petroleum
Exploration and Västra Hamnen Funds. 

OCAS is an advanced market-driven material research center based in Belgium. 
OCAS' part in the investment is taken up by its sister company, the investment
fund Finindus. OCAS will support Powercell Sweden with the development and
optimizing of materials and their implementations. 

The Swedish Energy Agency's portion of the investment comprises a loan of SEK 30
M for three years.

July 2, 2009

Journalists who would like further information, please contact
Per Wassén, Investment Director Volvo Technology Transfer and Chairman of
Powercell Sweden AB, tel +46 (0) 708 960 055
Per Ekdunge, CEO Powercell Sweden, tel +46 (0)708 66 58 19
Mårten Wikforss, Press Contact, AB Volvo, tel +46 (0)31-66 11 27

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The Volvo Group is one of the world's leading manufacturers of trucks, buses and
construction equipment, drive systems for marine and industrial applications,
aerospace components and services. The Group also provides complete solutions
for financing and service. The Volvo Group, which employs about 100,000 people,
has production facilities in 19 countries and sells their products in more than
180 markets. In 2008 annual sales of the Volvo Group amounted to about SEK 300
billion. The Volvo Group is a publicly-held company headquartered in Göteborg,
Sweden. Volvo shares are listed on OMX Nordic Exchange Stockholm. For more
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AB Volvo (publ) may be required to disclose the information provided herein
pursuant to the Securities Markets Act. The information was submitted for
publication at 01.00 pm. CET, 2 July, 2009.