Daimler Trucks and Buses, Paccar, and Cummins’ Accelera business unit are joining forces in a US$2-3 billion venture to manufacture battery cells for electric commercial vehicles and industrial applications.

The investment will establish a 21-gigawatt-hour (GWh) factory in the U.S.

Each company will own 30%, and jointly control, the venture that will initially focus on lithium-iron-phosphate batteries, promising lower costs, longer lifespans, and enhanced safety, without using nickel or cobalt.

EVE Energy will hold the remaining 10% stake and contribute the battery cell design and manufacturing expertise. That business is publicly traded on the Shenzhen stock exchange.

The venture will offer the scale to access cost-effective and differentiated battery cell technologies, the companies say.

“We have the responsibility to decarbonize in a way that is best for all of our stakeholders and the planet. This requires working closely with key partners,” Cummins CEO Jennifer Rumsey said in a press release.

“Today’s announcement reflects that action. Not only are we advancing a key technology solution for our customers, but accelerating the energy transition in the United States.”

“For Daimler Truck, partnerships and a strict focus on costs and smart capital allocation are the key levers to succeed on the path towards sustainable transportation,” added Martin Daum, CEO of Daimler Truck.

“This planned joint venture enables economies of scale beyond Daimler Truck. It is a key puzzle piece of our battery industrialization strategy, ensuring access to the right battery cell technology at the right cost.”

Paccar CEO Preston Feight said locally produced batteries will help customers achieve operational and environmental goals.

All three companies have committed to reducing carbon emissions, in keeping with the Paris Climate Agreement.

The joint venture is still subject to customer closing conditions and Committee on Foreign Investment in the U.S. (CFIUS) approval.