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Tue August 11 2020

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Volvo and Daimler team up for fuel cell venture

21 Apr Hydrogen fuel cells are seen by some as the future clean power source for heavy machinery; and their time may come sooner as a result of two top truck makers teaming up.

Daimler Truck AG and the Volvo Group have signed a preliminary agreement to set up a joint venture to develop, produce and commercialise fuel cell systems for heavy-duty vehicle applications.

Daimler will consolidate all its current fuel cell activities in the joint venture; Volvo will give Daimler €600m for a 50% share.

While the core target market is long-haul trucking, other automotive and non-automotive use cases – such as construction machinery – are also part of the new joint venture’s scope.

“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,” said Daimler Truck chairman 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. This joint initiative with the Volvo Group is a milestone in bringing fuel cell powered trucks and buses onto our roads.”

Volvo Group president and CEO Martin Lundstedt said: “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.”

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Volvo and Daimler will continue to compete in all other areas of business but joining forces in fuel cell development is expected to accelerate the market introduction of affordable fuel cell systems.

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

Daimler has been working on drive technologies based on hydrogen for more than 30 years and its fuel cell vehicles have travelled millions of miles in that time, demonstrating the marketability of this drive concept, the company says. However, there are still issues to be addressed regarding service life and payload availability. “The decisive criterion for truck and bus customers is the total cost of ownership,” Daimler says. The same is likely to be true for construction machinery.

At this stage, the signed preliminary agreement between Volvo and Daimler Truck is non-binding. A final agreement is expected by September, with closing by Christmas.

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