Volvo and Daimler team up in joint venture

In a joint press statement released overnight, it was announced that Daimler Truck AG and the Volvo Group, have signed a preliminary non-binding agreement to establish a new joint venture. The intention of the joint venture is to develop and produce fuel cell systems for heavy-duty vehicle applications and other uses.

Daimler will consolidate all its current fuel cell activities in the joint venture. The Volvo Group will acquire 50 per cent of the joint venture for approximately 600 million euros.

“Transport and logistics keep the world moving, and the need for transport will continue to grow. Truly CO2-neutral transport can be accomplished through electric drivetrains with energy coming either from batteries or by converting hydrogen on board into electricity,” said Martin Daum, Chairman of the Board of Management Daimler Truck AG and Member of the Board of Management of Daimler AG.

“For trucks to cope with heavy loads and long distances, fuel cells are one important answer and a technology where Daimler has built up significant expertise through its Mercedes-Benz fuel cell unit over the last two decades. This joint initiative with the Volvo Group is a milestone in bringing fuel cell powered trucks and buses onto our roads,” Mr Daum added.

Martin Lundstedt, Volvo Group President and CEO commented: “Electrification of road transport is a key element in delivering the so called Green Deal, a carbon neutral Europe and ultimately a carbon neutral world. Using hydrogen as a carrier of green electricity to power electric trucks in long-haul operations is one important part of the puzzle, and a complement to battery electric vehicles and renewable fuels.

“Combining the Volvo Group and Daimler’s experience in this area to accelerate the rate of development is good both for our customers and for society as a whole,” he said.

“By forming this joint venture, we are clearly showing that we believe in hydrogen fuel cells for commercial vehicles. But for this vision to become reality, other companies and institutions also need to support and contribute to this development, not least in order to establish the fuel infrastructure needed,” Mr Lundstedt concluded.

The statement went on to say that Volvo Group and Daimler Truck AG will be 50/50 partners in the joint venture, which will operate as an independent and autonomous entity, with Daimler Truck AG and the Volvo Group continuing to be competitors in all other areas of business.

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It added that joining forces will decrease development costs for both companies and accelerate the market introduction of fuel cell systems in products used for heavy-duty transport and demanding long-haul applications. In the context of the current economic downturn cooperation has become even more necessary in order to meet the Green Deal objectives within a feasible time-frame.

The common goal is for both companies to offer heavy-duty vehicles with fuel cells for demanding long-haul applications in series production in the second half of the decade. In addition, other automotive and non-automotive use cases are also part of the new joint venture’s scope.

The joint venture will include the operations in Nabern, Germany (currently headquarters of the Mercedes-Benz Fuel Cell GmbH) with production facilities in Germany and Canada.

The signed preliminary agreement is non-binding. A final agreement is expected by the third quarter of this year and closing before the end of the year.