GOTHENBURG, Sweden — The US Government and the Swedish State intend to extend their cooperation with the Volvo Group concerning development of alternative drivelines. The consequences of the extended cooperation include the US Department of Energy and the Swedish Energy Agency providing a three-year grant to the Volvo Group in a combined amount of USD$18-million for the development hybrid technology and drivelines for alternative fuels. The cost will be split evenly between the two groups.

The cooperation will span three years and is an extension of the one-year research and cooperation agreement signed between the Volvo Group and the Swedish and US governments in June 2007. The cooperation is aimed at reducing heavy vehicles’ use of fossil fuels through research and development projects in the areas of energy efficiency, drivelines for alternative fuels and hybrid solutions.

“The climate issue and increasing fuel prices make energy use and energy efficiency some of the most important societal issues of our time. The transportation industry has a special responsibility and this research and development cooperation with the US Government is crucial in our efforts to develop the drivetrains and technology required by both our customers and society as a whole,” says Leif Johansson, CEO of the Volvo Group.

The Volvo Group for its part has undertaken to invest an amount corresponding to USD$18 million, making the total investment in research and development within the framework of the cooperation agreement amount to USD$36 million. As a result of the agreement signed last year, the Volvo Group is already involved in a number of projects. For example, the Volvo Group subsidiary Mack Trucks is participating.