STUTTGART, Germany, and GOTHENBURG, Sweden — The Volvo Group and Daimler Truck AG have signed a formal, binding agreement for a joint venture to develop, produce and commercialize fuel-cell systems for use in heavy-duty trucks as the primary focus, as well as other applications. The two companies initially announced the signing of a preliminary nonbinding agreement in April.
According to a Nov. 2 statement released by Volvo and Daimler, the ambition of both partners is to make the new company a leading global manufacturer of fuel cells; by doing so, they hope to help the world take a major step toward climate-neutral and sustainable transportation by 2050.
Under the terms of the formal agreement, the Volvo Group will acquire 50% of the partnership interests in Daimler Truck Fuel Cell for approximately 0.6 billion euros (about $702,269 U.S. dollars) on a cash, debt-free basis. The Volvo Group and Daimler Truck AG will own equal interests in the joint venture but will continue to be competitors in all other areas such as vehicle technology and fuel-cell integration in trucks.
The transaction is expected to close during the first half of 2021, but 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,” said Martin Daum, chairman of the board of management for Daimler Truck AG and member of the board of management for Daimler AG. “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.”
The joint venture will take advantage of the expertise and extensive experience from several decades of development work on fuel-cells at Daimler, along with both companies’ experience in technology development, industrialization and large-scale vehicle production.
“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,” said Martin Lundstedt, president and CEO of Volvo Group. “The formation of our fuel-cell joint venture is an important step in shaping a world we want to live in.”
In addition to trucks, there are other areas of application for the type of fuel-cell system Volvo and Daimler plan to create. The joint venture will develop 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.
The two companies hope to begin customer testing of fuel-cell trucks by 2023, and to begin series production during the second half of this decade.