The Volvo Group and Daimler Truck have signed a binding agreement for a joint venture (JV) to develop, produce and commercialise fuel cell systems for use in heavy-duty trucks as the primary focus, as well as other applications.

Both partners say they hope to make the new company a leading global manufacturer of fuel cells, thereby taking a major step towards climate-neutral and sustainable transportation by 2050.

The Volvo Group will acquire 50% of the partnership interests in Daimler Truck Fuel Cell.

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 and our intended partner, the Volvo Group, the hydrogen-based fuel cell is a key technology for enabling carbon-neutral transportation in the future,” says Daimler Truck chairperson Martin Daum.

“We are both fully committed to the Paris Climate Agreement for decarbonising road transport and other areas, and to building a prosperous jointly held company that will deliver large volumes of fuel cell systems.”

The JV will take advantage of the expertise and experience from several decades of development work on fuel cells at Daimler.

“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,” adds Volvo Group president and CEO Martin Lundstedt.

The JV 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 JV’s products are, however, also ideally suited for other uses, such as stationary power generation.

The Volvo Group and Daimler Truck will own equal interests in the new JV, 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.

Rolls-Royce and Daimler Truck signed an agreement in 2020 to cooperate on stationary fuel cell generators for the carbon-neutral emergency power supply of critical facilities, such as data centres.

The intention is to offer emission-free alternatives to diesel engines, which are currently applied in generators for emergency use.