Volvo and Daimler Up-Scale Fuel Cell Agreement

Paul Myles

TU-Editor

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2nd November 2020

Following a trial joint fuel cell project for heavy duty trucks, Volvo and Daimler have signed a binding contract to work on the technology.

The joint venture between Volvo Group and Daimler Truck comes after the pair first started hydrogen fuel cell cooperation in spring. Now the pair hope to make their new entity a leading global manufacturer of fuel cells boosting both automakers’ climate credentials in line with climate-neutral and sustainable transportation by 2050.

Volvo will acquire 50% of the partnership interests in Daimler Truck Fuel Cell GmbH & Co. KG for approximately $708M 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.

Naturally, both automakers bring a deep and proven knowledge of modularity, efficiency and reliability as well as leading processes in areas such as quality, production technology and industrialization. The future joint venture hopes to build on that tradition to take a similar position in fuel-cells as in the companies’ existing commercial vehicles.
The new entity expects to develop a system with several power stages, including a twin system with 300 kW continuous power for heavy-duty long-haul trucks. However, the development of units based on the demanding conditions in heavy-duty truck applications, the joint venture’s products could also be applied in other use cases such as stationary power generation.
Martin Daum, chairman of the board of management of Daimler Truck AG and member of the board of management of Daimler AG, said: “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.”
Martin Lundstedt, president and CEO of the Volvo Group, added: “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. The formation of our fuel-cell joint venture is an important step in shaping a world we want to live in.”

— Paul Myles is a seasoned automotive journalist based in London. Follow him on Twitter @Paulmyles_