Volvo, Daimler Finalize Joint Venture On Fuel Cells

The Volvo Group and Daimler Truck AG announced they have a signed binding agreement for a joint venture to develop, produce and commercialize fuel cell systems for use in heavy-duty trucks and other applications. In the spring, the companies first announced the preliminary non-binding agreement to form the joint venture.

The ambition of both partners is to make the new company a leading global manufacturer of fuel cells. The Volvo Group will acquire 50% of the partnership interests in Daimler Truck Fuel Cell GmbH & Co. KG for approximately €0.6 billion on a cash and debt-free basis. Closing of the transaction is expected during the first half of 2021. 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,” said Martin Daum, chairman of the board of management of Daimler Truck AG and member of the board 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.”

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.

“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 the 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 also other areas of application for this type of fuel cell system. 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.

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 centers. 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.