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Daimler and Volvo seal fuel cell tie-up

Alliance inserts large trucking players into fast-moving competition

Daimler Trucks AG and Volvo Group have formalized their fuel cell-making joint venture. (Photo: Daimler Trucks)

The Volvo Group and Daimler Truck AG will waste no time in developing hydrogen-powered fuel cells for long-haul trucking now that they have signed a binding agreement to form a joint venture in the rapidly expanding field of manufacturers pursuing the zero-emissions technology.

Daimler and Volvo are two of the world’s largest heavy-duty truck makers. Working together helps both companies. Daimler brings decades of fuel cell experience. Volvo brings cash to accelerate the work. Volvo is paying almost $700 million cash (600 million euros) for 50% of Daimler Truck Fuel Cell GmbH & Co. KG.

“I think it’s a smart move for both,” Antti Lindstrom, a trucking analyst for IHS Markit, told FreightWaves. “Daimler saves money in R&D by having Volvo chip in 600 million euros when money is tight. For Volvo, Daimler’s deep market geographic penetration and segments is a door-opener. It basically combines the ‘out-of-the-box’ thinking of Volvo with Daimler’s bulk.”

From a position of strength

Both have extensive technology development, industrialization and large-scale vehicle production experience. They build hundreds of thousands of diesel-powered trucks a year.  

Deep knowledge of modularity, efficiency and reliability will be in place from the get-go, according to a press release on Monday. They will separately pursue vehicle technology and fuel-cell integration in trucks.

Customer tests of fuel cell trucks will begin in about three years. Series production is planned for the second half of this decade.

Don’t forget the batteries

Volvo and Daimler also are pursuing battery-electric-powered trucks. They are testing Class 8 electric trucks in climate-conscious Southern California.

“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, Volvo Group President and CEO. “The formation of our fuel-cell joint venture is an important step in shaping a world we want to live in.” 

Said Martin Daum, Chairman of the Board of Management of Daimler Truck AG and Member of the Board of Management of 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.” 

Lots of competition

The plan to build large volumes of 300 kilowatt (kW) continuous power for heavy-duty long-haul the second half of the decade inserts Daimler and Volvo in the competition with South Korea’s Hyundai Motors and Japan’s Toyota Motor Co. and its subsidiary Hino Trucks. Both plan fuel cell trucks for global markets in coming years. 

Startup Nikola Motors is targeting 2023 for manufacturing fuel cell trucks at a new plant in Coolidge, Arizona. Nikola (NASDAQ: NKLA) also is building battery-electric trucks.

Based on the demanding conditions in heavy-duty truck applications, the Daimler-Volvo joint venture’s products also suit stationary power generation, such as data centers.

That puts it in competition with Cummins Inc. (NYSE: CMI). Cummins has acquired several fuel cell-related and hydrogen businesses to bolster its efforts. Best known for its medium- and heavy-duty truck powertrains, Cummins has Power Distribution and New Power units. It also has a joint venture with Hyundai, which is delivering Xcient fuel cell trucks in Switzerland.

The Daimler-Volvo joint venture is targeting climate-neutral and sustainable transportation by 2050. The business combination is expected to close in the first half of 2021 pending approvals.

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Click for more FreightWaves articles by Alan Adler.

Alan Adler

Alan Adler is an award-winning journalist who worked for The Associated Press and the Detroit Free Press. He also spent two decades in domestic and international media relations and executive communications with General Motors.