The Volvo Group and Daimler Truck AG have signed an agreement for a joint venture to develop, produce and commercialise fuel-cell systems.

The fuel-cell systems will be used in heavy-duty trucks as well as other applications.

The ambition of both partners is to make the new company a leading global manufacturer of fuel cells, and thus help the world take 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 GmbH & Co. KG for approximately €0.6 billion ($708 million) on a cash and debt-free basis.

The closing of the transaction is expected during the first half of 2021.

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

Martin Daum, chairman of the board of management of Daimler Truck AG and member of the board of management of Daimler AG, said: “For us at Daimler Truck AG and our intended partner, the Volvo Group, the hydrogen-based fuel-cell is a key technology for enabling CO2-neutral transportation in the future. We are both fully committed to the Paris Climate Agreement for decarbonizing road transport and other areas, and to building a prosperous jointly held company that will deliver large volumes of fuel-cell systems,”

“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. The formation of our fuel-cell joint venture is an important step in shaping a world we want to live in,” says Martin Lundstedt, President and CEO of the Volvo Group.