Volvo and Daimler’s truck divisions to jointly develop fuel cells

Companies form joint venture for large-scale production of fuel cells

Assembly line for a fuel cell drive unit in Kirchheim-Nabern [Credit: Daimler]

Volvo and Daimler have committed to a 50/50 joint venture for development and large-scale production of fuel cells for applications in heavy-duty vehicles and other use cases. Daimler will consolidate all its current fuel cell activities in the joint venture, which will operate as an independent and autonomous entity. The Volvo Group will acquire 50% in the joint venture for the sum of approximately EUR 0.6 billion on a cash and debt free basis.

Facts: Fuel cells and hydrogen as fuel

  • A hydrogen fuel cell converts the chemical energy of the fuel, in this case hydrogen, and oxygen (in the air) into electricity. The electricity powers the electrical motors that propel an electrical vehicle.
  • There are two main ways to produce the hydrogen needed. So-called green hydrogen can be produced locally at the gas station, using electricity to convert water into hydrogen. Blue hydrogen is expected to be produced from natural gas, utilizing carbon capture technology to create a carbon neutral fuel.

The two vehicle giants hope that Joining forces will decrease development costs for both companies and accelerate the market introduction of fuel cell systems. This is challenging and expensive currently for heavy-duty transport and demanding long-haul applications, as fuel cell infrastructure is limited and the production of the necessary hydrogen expensive, as are the fuel cells themselves.

Daimler said in a release that “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 venture sees production beginning 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 Q3 and closing before year-end 2020. All potential transactions are subject to examination and approval by the responsible competition authorities.

“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 drive trains with energy coming either from batteries or by converting hydrogen on board into electricity. 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,” says Martin Daum, Chairman of the Board of Management Daimler Truck AG and Member of the Board of Management of Daimler AG.

“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. 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,” says Martin Lundstedt, Volvo Group President and CEO.

 

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