The deal, valued at 1.2 billion euros, will create a new corporate entity with a 50/50 ownership ratio between Daimler and Volvo Trucks, which remains a separate company from the Geely automaker.
The project could have a significant impact on emissions. Commercial vehicle mileage far exceeds most passenger cars, but fuel economy is much worse.
Commercial applications could also alleviate fuel cell vehicles' biggest problem: the lack of hydrogen infrastructure. Vehicles traveling on designated routes can refuel at their designated terminals, reducing the need for a large network of public filling stations.
So far, the two companies have only signed a preliminary non-binding agreement. A definitive agreement is expected to be drafted by the third quarter of 2020 and signed by the end of the year.
By working together, the two companies hope to reduce development costs and speed up the production start-up of commercial fuel cell trucks.
Daimler and Volvo have invested in electric trucks.
Daimler will shift in-house fuel cell development resources from Mercedes' passenger car division to its truck division, which will trigger an immediate shutdown of the low-volume F-Cell fuel cell SUV.
Daimler's decision to shift its focus from similar projects to commercial vehicles is in line with industry trends. However, the idea of fuel cells for passenger cars has stalled, with only a few models in production and little sign that more are in development.
