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Daimler Cummins Paccar

Cummins, Daimler, Paccar to pour up to $3B into battery cell production plant in the US

Sept. 7, 2023
The venture will focus on lithium-iron-phosphate batteries for commercial electric vehicles with help from battery manufacturer EVE Energy serving as a technology partner.

Daimler TruckPaccar, and Cummins’ zero-emissions business unit, Accelera, are teaming up to produce battery cells in the U.S. for commercial electric vehicles with a total investment expected to be between $2 billion and $3 billion for a 21 gigawatt-hour factory, the three companies announced in a release.

Focusing on lithium iron phosphate (LFP) batteries, the companies will each own 30% of the venture. LFP battery manufacturer EVE Energy will serve as a technology partner with 10% ownership, and contribute its battery cell design and manufacturing knowledge. The LFP battery cells will be able to offer several advantages compared to other battery components, including lower cost, longer life, and enhanced safety, without the need for nickel and cobalt raw materials, the release says.

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

Daimler Truck CEO Martin Daum added, “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. 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.”

Paccar CEO Preston Feight stated, “Our vision is the highest quality, locally produced battery technology to enhance the operations of our customers and help them achieve their operational and environmental goals.”

The specific location and groundbreaking date are unnamed as of yet.

Industry analysis

When this battery plant is in full bloom and producing LFPs, it will have a huge impact on market.

“A 21-GWh plant, operating at full capacity in 2026 would provide enough batteries for the entire North American market for all battery electric buses and medium and heavy duty trucks combined, assuming about 10% of trucks are electric in that year," noted Jamie Fox, principal analyst at Interact Analysis, a provider of market data for the commercial vehicle industry.

He added that in 2028, that same capacity "would amount to around a 40% share of all electric buses and medium- and heavy-duty trucks."

Because of this added production, Fox suggested the joint venture may offer "some economies of scale" and reduce the "per kWh" price for medium- and heavy-duty truck and bus EV batteries, which can double that of a passenger car's.

Battery range, charging infrastructure, and cost have been primary sources of hesitancy for fleets seeking to adopt electric trucks, but longer lasting, more affordable batteries could make them reevaluate their concerns.

 “Some may want to wait and see until the factory has actually been built, but this announcement is big enough to make people who took a bearish stance on electric trucks in North America reconsider their position," Fox concluded.

About the Author

Cris Beaulieu

Cris Beaulieu is an Associate Editor for Fleet Maintenance magazine. She joined the team after working in local news media. She earned a bachelor’s in journalism at Cleveland State University along with a TV and Radio Broadcast degree at Ohio Media School.