The Volvo Group has signed a binding agreement with one of its main competitors, Daimler Truck AG, for a joint venture to develop, produce and commercialize fuel-cell systems for use in heavy-duty trucks.
The ambition of both partners is to make the new company a leading global manufacturer of fuel-cells, which would help both parties to take a major step towards climate-neutral and sustainable transportation by 2050.
As part of the deal, the Volvo Group will acquire 50% of the partnership interests in Daimler Truck Fuel Cell GmbH & Co. KG for approximately EUR 0.6 billion on a cash and debt-free basis. The closing of the transaction is expected during the first half of 2021.
In the future, the world will be powered by a combination of battery-electric and fuel-cell electric vehicles, along with other renewable fuels to some extent. The formation of our fuel-cell joint venture is an important step in shaping a world we want to live in” – says Martin Lundstedt, President and CEO of the Volvo Group.
The transaction is still subject to merger control review by relevant authorities, as well as other approvals.
For us at Daimler Truck AG and our intended partner, the Volvo Group, the hydrogen-based fuel-cell is a key technology for enabling CO2-neutral transportation in the future. We are both fully committed to the Paris Climate Agreement for decarbonizing road transport and other areas, and to building a prosperous jointly held company that will deliver large volumes of fuel-cell systems” – said Martin Daum, Chairman of the Board of Management of Daimler Truck AG and Member of the Board of Management of Daimler AG
Further applications of fuel cell systems
In addition to trucks, the joint venture will see the development of a system with several power stages, including a twin system with 300 kW continuous power for heavy-duty long-haul trucks. Based on the demanding conditions in heavy-duty truck applications, the joint venture’s products are also ideally suited for other use cases such as stationary power generation.
In 2020, Rolls-Royce plc and Daimler Truck AG signed an agreement to cooperate on stationary fuel-cell generators for the CO2-neutral emergency power supply of critical facilities such as data centres. The intention is to offer emission-free alternatives to diesel engines, which are currently applied in generators for emergency use. A final cooperation agreement is expected to be signed by the end of the year.
The Volvo Group and Daimler Truck AG will own equal interests in the joint venture, but continue to be competitors in all other areas such as vehicle technology and fuel-cell integration in trucks. Both companies’ goal is to start with customer tests of trucks with fuel-cells in about three years and to be in series production during the second half of this decade.
The closing of the transaction is expected during the first half of 2021. However, the transaction is still subject to merger control review by the relevant authorities, as well as other approvals.
Photo credit @ Daimler