Finally, I think a significant corner has been turned in the quest to bring hydrogen to the highway in heavy trucks. And I’m not referring to Nikola, significant though it is, rather to the deep pockets and vast engineering capabilities of Daimler Trucks AG and the Volvo Group. Each of the latter two outfits dwarfs the little Arizona company, but together they become a giant with resources galore.
And they have indeed come together, however unlikely that may seem. The two companies announced in late April a 50/50 joint venture to develop, produce, and commercialize fuel cell systems for heavy-duty vehicle applications and other uses like stationary power. Daimler will consolidate all its current fuel cell activities in the joint venture, while the Volvo Group will acquire 50% of it for about US$650 million.
The deal is subject to regulatory approval, though that would seem to be a foregone conclusion given Europe’s intense effort to create a sustainable and carbon-neutral transport system by 2050. The two companies intend to meet their Paris Agreement obligations, which include the end of internal combustion engine production by that year.
In a subsequent conference call with media, Martin Daum, chairman of the Board of Management at Daimler Truck, said the announcement is among the highlights of his 30-year career. “I dare call it a historic day for trucking,” he said.
For his part, Volvo Group president and CEO Martin Lundstedt said, “Partnership is the new leadership.”
And that in itself is big news. There have been other collaborations between OEMs in the recent past as car and truck makers struggle to meet the challenge of new technologies and environmental demands on their own, then realizing that there’s strength in numbers. But I can’t think of a coming together on the same scale as this one between two such fierce competitors. Once again, pragmatism wins.
Daimler and Volvo are quick to add that they’ll remain competitors “in all other areas.”
The German outfit has built up significant expertise through its Mercedes-Benz fuel cell unit over the last two decades and is now consolidating all those group-wide activities in a new Daimler Truck fuel cell enterprise – with Canadian content. It will be based in Nabern, Germany, with production facilities elsewhere in that country and in Vancouver. The JV will operate as an independent and autonomous entity, the companies said, the goal being to move fuel cell production to high volumes by the mid-2020s, and full-scale production about 10 years later.
Nikola, on the other hand, says it will produce its fuel cell trucks starting in 2022, with some 14,000 orders already in the can. It plans to develop fuelling stations – essentially truckstops with stores and restaurants — along the routes served by its early-adopter customers. It’s aiming to begin in the western U.S. before migrating eastward with the market, saying its Norwegian partner NEL will build about 700 stations starting in 2022.
Daimler and Volvo acknowledge that such infrastructure is obviously essential and that it will need other companies to join the effort. A comprehensive fueling network doesn’t yet exist in Europe, so I’ll bet that NEL plays a role there, too. Its leadership in that realm is clear.
What remains to be seen is whether Nikola’s infrastructure, which should be firmly in place long before Daimler/Volvo fuel cell trucks start plying North American highways, facilitates quick adoption of its new competitors’ machines. Will we see another partnership? This is going to get interesting.
By the way, in case you’re thinking hydrogen isn’t up to the truck task, consider that it has nearly three times the energy content of gasoline – 120 megajoules per kilogram for hydrogen versus 44 MJ/kg for gasoline.” Diesel fuel has 45 MJ/kg, while natural gas compressed to 3000 psi has 55 MJ/kg.
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