ATLANTA, GA – Navistar will bring a medium-duty electric powertrain to the North American marketplace by 2019/20, drawing on technical expertise available through Volkswagen Truck and Bus.

“There is an opportunity for electric and electric vehicles in the North American market,” said Troy Clarke, chairman, president, and Chief Executive Officer, referring specifically to the Class 6/7 segment. “It is still in the early stages of the product development cycle there, but that’s the target.”

Volkswagen officially secured a 16.6% stake in the company in March, and is already expected to bring a big bore diesel powertrain to North America by 2021 in addition to sharing other technologies.

It won’t be Navistar’s first foray into electric vehicles. The company launched its Class 3 eStar van several years ago, but that model was ahead of its time, Clarke said in a presentation during the North American Commercial Vehicle Show. MAN, a European nameplate owned by Volkswagen, recently released an electric truck of its own in the form of the eTruck.

Volkswagen has already delivered 10 electric medium-duty trucks to a customer in Austria, added Andreas Renschler, Chief Executive Officer of Volkswagen Truck and Bus, in a briefing to industry media.

Electrification continues to make inroads on transit buses and in applications that serve densely populated urban areas. From Paris to London and Mexico City, governments have also announced plans to ban diesel engines. “Many expect China will be the next country,” Clarke says.

In addition to slowing tailpipe emissions, the business case for electrification also continues to improve. Since 2010, battery costs have dropped about 16% per year. Other maintenance-related gains are realized because the trucks have fewer moving parts. Ranges to support fleets that drive relatively short distances and return to recharge at the end of the day are within reach.

The two companies will realize economies of scale by using the same powertrain on both sides of the Atlantic, Renschler says.

Components were even being shared before Volkswagen secured its equity stake. Navistar’s A26 engine shares a common “DNA” with MAN’s D26 diesel engine, Clarke observed. The engines certainly share a common crankcase and rotating components, although there are differences because of factors such as aftertreatment packages that are packaged differently.

The sharing of technology hardly ends there. Navistar and Volkswagen also expect to closely collaborate on a digital future for the businesses, through telematics capabilities. Navistar has 350,000 connected vehicles through its OnCommand platform, while Volkwagen has 300,000 with Rio. Once that data is stored on the cloud, the information is expected to be more powerful than the sum of the bits and bytes.

Together they are creating the largest digital vehicle platform in the world, Clarke says. The companies are also embracing an open architecture that embraces other to join.

The cloud is not European or American, Renschler stressed. It’s just the cloud.

Other gains realized through Volkswagen’s equity stake have emerged through procurement teams, who have already reached out to 250 new and existing suppliers, identifying 150 contracts and improvement opportunities, and completing 40 of them.

Said Clarke: “That is phenomenal progress.”