In a significant move to lead the digital transformation of the commercial vehicle industry, Volvo Group and Daimler Truck have reached a preliminary agreement to form a joint venture. The preliminary agreement signed by both companies is non-binding. A final agreement is expected within this year, with the aim to close the transaction by Q1 2025, pending necessary approvals from relevant authorities.
This joint venture represents a significant step forward in the evolution of the commercial vehicle industry, paving the way for more advanced, software-defined heavy-duty vehicles and setting new industry standards for innovation and efficiency. It intends to become a leading developer of standardised hardware and software, enabling both companies, as well as potential partners, to enhance their products with innovative digital features.
A couple of years ago, Volvo Group and Daimler Truck laid out a roadmap for their fuel-cell joint venture, cellcentric, to develop, produce, and commercialise fuel-cell systems primarily for heavy-duty trucks. Aiming to become a leading global manufacturer of fuel-cell systems, cellcentric plans to establish one of Europe’s largest series production facilities for fuel-cell systems, with operations set to begin in 2025. While this initiative is designed to accelerate the adoption of hydrogen-based fuel cells for long-haul trucks and other applications, the current partnership is focused on digital technology development, underscoring the importance of collaboration to efficiently meet customer expectations and achieve development goals in the context of significant investments in CO2-neutral drive technologies.
Strategic Partnership
Volvo Group and Daimler Truck plan to hold equal stakes in the joint venture, which will function as an independent entity. Despite this collaboration, both companies will remain competitors in all other business areas. Martin Lundstedt, President and CEO of Volvo Group, stated, “Volvo Group and Daimler Truck are two individually great companies. Now we are combining our forces to accelerate the customer benefits that a software-defined truck platform will bring. Given the rapid transformation of our industry, it makes sense to collaborate to accelerate development, increase volumes, and share costs. Software-defined heavy-duty trucks represent a paradigm shift in our industry. Making the truck a programmable device with standardised hardware and operating system for fast product updates will allow us to create value for our customers through differentiating digital services and solutions. Partnership is truly the new leadership.”
Martin Daum, CEO of Daimler Truck, added, “Just as important as the transformation towards CO2-neutral drive technologies is the digitalisation in the vehicle. Developing a common software-defined vehicle platform with Volvo Group will enable us to turn our vehicles into programmable devices. This will allow us to build differentiating digital vehicle features with significantly greater speed and efficiency for our truck and bus customers around the globe. Together with Volvo Group, we can develop a benchmark truck operating system and set an industry standard.”
The joint venture will be headquartered in Gothenburg, Sweden, and will integrate existing assets and resources from both companies. The goal is to establish the industry standard for a truck operating system, with plans to offer its products to other original equipment manufacturers (OEMs). The joint venture will provide a common developer platform as a service, enabling customers to build their own software layers on top.
Volvo Group and Daimler Truck will continue to compete and differentiate their complete product and service offerings, including their digital solutions. Each company will develop and provide its own end-user applications atop the shared platform to offer unique digital vehicle features to their customers.
Also Read:
DICV Sets Sales, Revenue Records In CY23, Scripts Strategy For Aggressive Growth