Daimler, Volvo shed light on new fuel cell joint venture – Truck News

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NABERN, Germany – Longtime truck-making rivals Daimler Truck
AG and Volvo Group announced the formation of a joint venture this morning, which
will see them jointly develop hydrogen fuel cells for use in both truck brands,
and potentially others.

Daimler is folding its expertise, ongoing fuel cell-related
activities and intellectual property rights into the new joint venture, and
Volvo will buy a 50% stake for $600 million Euros (USD$650.8 million). Both companies
will further invest “nine-digit” figures into the initiative, Martin Daum,
chairman of the Board of Management at Daimler Truck AG said during a conference
call with media this morning.

Martin Daum, left, and Martin Lundstedt, are the global leaders of Daimler Trucks and Volvo Group, respectively.

“Partnership is the new leadership,” Volvo Group president
and CEO Martin Lundstedt added, referring to the unlikely pairing. Both executives
acknowledged the partnership will speed up development of fuel cell technology in
commercial applications, which will help the truck makers meet their Paris Agreement
obligations, including the end of production of internal combustion engines by
2050.

“We will, of course, remain competitors in all other areas.”

Martin Lundstedt, Volvo Group

The joint venture will be based in Nabern, Germany, where
most of Daimler’s fuel cell activity is currently located, but production facilities
will exist at a “subsidiary” in Vancouver, B.C., as well as in Germany, Daum
said. The JV will operate as an independent and autonomous entity, the
companies said, and will reduce development costs for both companies while
accelerating market penetration.

“We will, of course, remain competitors in all other areas,”
Lundstedt stressed. “But we share the same vision of a transformation towards
sustainable transportation solutions. By working together, we are able to move
faster, which is good for our customers and more importantly, to society as a
whole.”

The joint venture is non-binding and still subject to
regulatory approval.

Hydrogen fuel cells are seen as complementary to battery-electric
technologies in commercial trucks, especially in longhaul and heavy
applications, since energy can be produced onboard the vehicle.

Daum said today’s announcement is among the highlights of
his 30-year career. “I dare call it a historic day for trucking,” he said.

The goal is to move fuel cell production to high volumes by
the mid-2020s, and full-scale production about 10 years later.

“We are not starting from scratch today at all,” said Daum. “Rather
we are building on a reliable, mature foundation. We have a long history of
research and development of this technology.”

Daum said the partnership should also serve as a “call to
action” to other stakeholders, who will be needed to help roll out the
infrastructure needed to support hydrogen fuel cell-powered trucks.

“We are not able to accomplish this task alone,” said Daum. “Today,
we have very strongly and jointly made the first bold move to get us going.”

The JV may also be willing to supply its fuel cell
technology to other manufacturers.

“The joint venture company will produce a fuel cell that can
go into Daimler trucks and Volvo trucks, and can go in other vehicles as well and
off-highway usage such as power generation,” Daum explained. “We want to
establish here, a company that is not just two shareholders – why not an entire
industry? Our clear target is to have the most capable fuel cell system in the
market.”

Asked if the truck makers were motived by competitive
pressures from upstart manufacturers looking to bring hydrogen-powered trucks
to the market, Daum retorted “We put as much competitive pressure on others as
they put on us.”

Pre-series production is expected to begin around 2024-2025,
but it will be the mid-2030s before the systems enter series production, Daum
predicted. That’s still plenty of time before the Paris Agreement requirements.

The joint venture will initially consist of about 250
employees. Lundstedt, who like Daum has been in the industry for about 30
years, said he’s excited about the potential.

“Fuel cells have always been 10 years away,” he said. “For
the first time in my career, they’re sooner than 10 years away.”

Added Daum: “I’m very optimistic that 20 years from now,
this will cover the entire market and 95% of applications.”

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