Stockholm / Stuttgart - Two of Europe's top truck manufacturers, Daimler Truck and the Volvo Group, have joined forces to develop and produce fuel cells for heavy-duty vehicles, the two companies announced this week.
Daimler and Volvo signed a preliminary non-binding agreement to establish a joint venture in which Daimler would bundle all its fuel cell activities. In return, Volvo Group would acquire a 50 percent stake in the new joint venture from Daimler for approximately 600 million euros (R13.3bn), the companies announced.
"This joint initiative with the Volvo Group is a milestone in bringing fuel cell-powered trucks and buses onto our roads," said Martin Daum, chairman of the board of management of Daimler Truck AG.
Through the joint venture, the two companies were seeking to reduce development costs and "accelerate the market introduction" of fuel cell systems in products for heavy-duty transport and demanding long-haul applications.
"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," said Martin Lundstedt, Volvo Group president and CEO.
The European Green Deal was unveiled by the European Commission last December to make the bloc carbon neutral by 2050.
European Commission President, Ursula von der Leyen, has described it as "our new growth strategy - a strategy that gives more back than it takes away."
"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," Lundstedt added.
The common goal of the joint venture is to provide market-ready fuel cells for demanding long-haul applications of heavy-duty vehicles through mass production in the "second half of the decade."
A final agreement is expected by the third quarter and to be closed before the end of 2020, the companies announced.
All potential transactions were also subject to examination and approval by the responsible competition authorities.