Daimler Truck, Paccar Inc. and Cummins Inc. are forming a multibillion-dollar joint venture with a Chinese battery maker to produce cells for commercial vehicles in the U.S.

Cummins, Daimler and Paccar each will hold 30% stakes in the JV. Ten percent will go to technology partner Huizhou, China-based EVE Energy, which has a U.S. sales office near Columbus, Ohio. EVE’s website shows test production of lithium iron phosphate (LFP) cells in the second quarter of 2022. Wednesday’s announcement talked about a factory with 21 gigawatt-hour capacity. That’s roughly the energy to power 16 million homes.

LFP battery cells offer lower cost, longer life and enhanced safety, without using nickel and cobalt raw materials.

The Cummins-Daimler-Paccar joint venture will manufacture battery cells for electric commercial vehicles and industrial applications. The total investment is expected to be $2 billion to $3 billion, the companies said in a news release.

Daimler contracts for LFP batteries with Contemporary Amperex Technology Co. Ltd. (CATL) for commercial trucks. It uses lithium-ion batteries from Proterra Inc. in its school bus and chassis businesses.

‘Strict focus on costs and smart capital allocation’

“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,” CEO 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.”

Paccar had planned to use batteries from startup Romeo Power in a five-year agreement that began in 2020. Nikola Corp. later acquired Romeo and is liquidating its assets. Second-generation Paccar heavy-duty electric trucks should begin with DAF Trucks in Europe in 2024.

“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,” Paccar CEO Preston Feight said.

Cummins, through its Accelera unit, makes electric buses for Gillig as well as fully integrated electric chassis for commercial vehicles.

“Not only are we advancing a key technology solution for our customers, but accelerating the energy transition in the United States,” Cummins CEO Jennifer Rumsey said.

Increased adoption of electric vehicles has produced more than $150 billion of EV-related manufacturing plant projects across 16 U.S. states, according to a new report from CBRE.

Automakers General Motors, Ford and Stellantis have moved to locally produce batteries for electric vehicles. Ford announced in August a partnership with South Korean battery manufacturers SK On and EcoPro BM to build an $890 million cathode manufacturing facility in Quebec, Canada. It will provide battery materials for future Ford electric vehicles.

Government incentives like the Inflation Reduction Act and CHIPS and Science Act are designed to boost U.S. production of critical technologies for zero-emission EVs. In trucking, the demand is driven by California, which is banning new internal combustion-powered trucks from its roads by 2035. 

The joint venture likely will be reviewed by the Committee on Foreign Investment in the United States for any conflict with national security.

Related articles:

As electric batteries evolve, it’s all about the range

Volvo, Mack replacing batteries on electric trucks because of fire risk 

Nikola will recall 209 battery-electric trucks following 2 fires

Click for more FreightWaves articles by Alan Adler.