Large scale production and commercialisation of hydrogen fuel cells has been given a boost by a joint venture between two of the world's biggest commercial vehicle manufacturers.
Daimler Truck AG and Volvo Group overnight announced they have signed a preliminary non-binding agreement to establish the new joint venture.
The intention is to develop, produce and commercialise fuel cell systems for heavy-duty vehicle applications and other use cases according to a media release that confirmed Daimler will consolidate all its current fuel cell activities in the joint venture.
Volvo Group will acquire 50 per cent in the joint venture for the sum estimated to be worth $1.35 billion on a cash and debt free basis.
As energy is emitted from batteries or by converting hydrogen on board into electricity, CO2-neutral transport can be accomplished through electric drive trains said Chairman of the Board of Management Daimler Truck AG Martin Daum.
"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," he said.
"This joint initiative with the Volvo Group is a milestone in bringing fuel cell powered trucks and buses onto our roads,” said Daum.
Using hydrogen as a carrier of green electricity to power electric trucks in long-haul operations is one important part of the puzzle according to Volvo Group President and CEO Martin Lundstedt.
"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," he said.
"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,” said Lundstedt.
The joint venture will operate as an independent and autonomous entity, with Daimler Truck AG and the Volvo Group continuing to be competitors in all other areas of business.
It is anticipated that costs for both companies will be decreased by joining forces while accelerating the market introduction of fuel cell systems in products used for heavy-duty transport and demanding long haul applications.
In the context of the current economic downturn cooperation has become even more necessary, the companies said in the media release, in order to meet a common goal which follows European Green Deal objectives to turn a 27 country bloc to a low carbon economy, at a cost estimated to be more than $1.7 trillion within the next decade.
To enable the joint venture, Daimler Trucks is bringing together all group-wide fuel cell activities in a new Daimler Truck fuel cell unit.
Part of this bundling of activities is the allocation of the operations of what is calls “Mercedes-Benz Fuel Cell GmbH”, which has longstanding experience in the development of fuel cell and hydrogen storage systems for various vehicle applications, to Daimler Truck AG.
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.
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