Daimler Trucks & Buses is joining forces with Cummins’s zero-emissions business unit Accelera and PACCAR to form a joint venture that will produce battery cells for electric commercial vehicles and industrial applications in the United States.

The plan is for Daimler Truck, Accelera, and PACCAR to each own a 30% share of the joint venture. An estimated $2-3 billion is to be invested into the creation of a 21-gigawatt-hour factory in the U.S. that will initially focus on batteries using lithium-iron-phosphate chemistry that do not require nickel and cobalt. The remaining 10% of the joint venture will be owned by Chinese company EVE Energy which will contribute its battery cell design and manufacturing knowledge.

“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,” Daimler Truck chief executive Martin Daum said. “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.”

 Daimler, Cummins, PACCAR To Form U.S. Battery Joint Venture, Planning 21 GWh Plant

The planned joint venture remains subject to customary closing conditions and will need to be approved by the Committee on Foreign Investment in the United States. A location for the planned factory has not yet been announced.

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

The companies involved state that the lithium-iron-phosphate battery cells they will produce will be cheaper, have a longer life, and improved safety characteristics compared to other battery chemistries.

 Daimler, Cummins, PACCAR To Form U.S. Battery Joint Venture, Planning 21 GWh Plant