The race to electrify the commercial vehicle industry is heating up, and three major players have joined forces to create a new joint venture that aims to advance battery cell production and the battery supply chain in the United States. Accelera by Cummins, Daimler Truck, and PACCAR announced on September 6, 2023, that they are partnering to build a 21-gigawatt hour (GWh) battery cell factory in the U.S., with a total investment expected to be in the range of $2-3 billion. The joint venture will manufacture lithium-iron-phosphate (LFP) battery cells for electric commercial vehicles and industrial applications, creating highly desirable U.S. manufacturing jobs in the growing clean technology sector.
Why LFP Battery Cells?
LFP battery cells are a type of lithium-ion battery chemistry that uses iron and phosphate as the cathode material instead of nickel and cobalt, which are more commonly used in other battery chemistries. LFP battery cells offer several advantages over other battery types, such as lower cost, longer life, enhanced safety, and higher thermal stability. LFP battery cells also have a lower environmental impact, as they do not require scarce and expensive raw materials like nickel and cobalt, which are often mined in regions with poor labor and human rights standards.
LFP battery cells are well suited for commercial battery-electric trucks, as they can provide high power output, fast charging capability, and long cycle life. LFP battery cells can also withstand harsh operating conditions, such as high temperatures, vibrations, and shocks, which are common in commercial vehicle applications. LFP battery cells have been widely used in electric buses, electric two-wheelers, and energy storage systems but have not yet gained significant market share in electric passenger cars or trucks.
The Role of EVE Energy
The joint venture will leverage the industry-leading battery cell design and manufacturing know-how of EVE Energy [SZSE:310004], a global leader in the manufacture of LFP battery cells for the vehicle industry. EVE Energy will serve as the technology partner in the joint venture with 10% ownership and will contribute its expertise in LFP battery cell development, production, and quality control. EVE Energy is publicly traded on the Shenzhen stock exchange and has been producing LFP battery cells since 2001. EVE Energy has a strong track record of supplying LFP battery cells to leading customers in China and abroad, such as BYD, Daimler Truck China, Volvo Trucks China, Tesla China, CATL, and LG Chem.
The Vision of the Joint Venture Partners
The joint venture partners share a common vision of creating the highest quality, locally produced battery technology to enhance their customers' operations and help them achieve their operational and environmental goals. The joint venture partners also recognize the importance of securing a reliable and cost-effective supply of battery cells for their own electric vehicle products and services. By creating the joint venture, the partners aim to create the necessary scale for access to differentiated battery cell technology that can meet the growing demand for battery technology throughout this decade and beyond.
Accelera by Cummins is the zero-emissions business unit of Cummins Inc. [NYSE: CMI], a global leader in power solutions for commercial and industrial markets. Accelera by Cummins offers a portfolio of zero-emissions products and services for customers who want to reduce their carbon footprint and comply with increasingly stringent emissions regulations. Accelera by Cummins provides battery-electric powertrains, hydrogen fuel cell systems, electrolyzers, renewable natural gas solutions, and charging infrastructure solutions.
Daimler Truck is one of the world's largest manufacturers of commercial vehicles and a pioneer in electric mobility. Daimler Truck offers a range of electric trucks under its brands Mercedes-Benz Trucks, Freightliner Trucks, FUSO Trucks, BharatBenz Trucks, Western Star Trucks, Thomas Built Buses, Setra Buses & Coaches. Daimler Truck has a clear ambition to offer only new vehicles that are CO2-neutral in driving operations ("tank-to-wheel") in Europe, Japan, and North America by 2039.
PACCAR [NASDAQ: PCAR] is a global technology leader in the design, manufacture, and customer support of high-quality light-, medium- and heavy-duty trucks under the Kenworth, Peterbilt, and DAF nameplates. PACCAR also designs and manufactures advanced powertrains, provides financial services and information technology, and distributes truck parts related to its principal business. PACCAR has been developing and producing zero-emission vehicles since 2017, including battery-electric and hydrogen fuel cell trucks for various applications.
The joint venture between Accelera by Cummins, Daimler Truck, and PACCAR is a significant milestone in the electrification of the commercial vehicle industry in the United States. The joint venture will create a new powerhouse for battery cell production and the battery supply chain in the U.S., with a focus on LFP battery technology that offers lower cost, longer life, and enhanced safety. The joint venture will also benefit the customers, the environment, and the economy by providing high-quality, locally produced battery technology that can help reduce greenhouse gas emissions and create new jobs in the clean technology sector.
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