Monday, February 26, 2024
HomeBusinessRevolution $3 Billion: Electrify Commercial Vehicles Monster Truck Venture

Revolution $3 Billion: Electrify Commercial Vehicles Monster Truck Venture

Cummins, Daimler, and Paccar, the three major players in the trucking industry, are collaborating on a multi-billion-dollar project to manufacture battery cells for commercial vehicles and other industrial applications in an American plant, making it the largest of its kind in North America.

These companies collectively intend to invest up to $3 billion in the project and currently hold undisclosed stakes in a joint venture, which is expected to materialize within three years.

Cummins’ Commercial Vehicles CEO and President, Jennifer Ramsey, informed Forbes that the factory’s location will annually produce 21 gigawatt-hours of lithium iron phosphate, or LFP, battery cells. Chinese battery manufacturer EVE Energy is partnering with the project and owns a 10% stake, contributing its LFP cell technology.

Electrifying Commercial Vehicles
Electrifying Commercial Vehicles

Cummins, a diesel engine powerhouse expanding into clean tech, and the two truck manufacturers, are teaming up because our industry is undergoing a transformation, shifting towards cost-competitive, performance-proven cells that we can use in every https://chargedevs.com/features/cummins-the-diesel-engine-powerhouse-has-had-a-busy-year-expanding-its-ev-systems-development/battery pack. “We are manufacturing freely,” Ramsey said.

While many battery plants are focusing on electric cars, Ramsey is not familiar with any other battery projects specifically targeting commercial vehicles and industrial applications in the United States or North America.

This project aligns with Cummins’ health as it recently launched its clean-tech unit, Accelera, to compete in the growing market for battery-electric and hydrogen fuel cell-powered trucks. These trucks also compete with manufacturers of passenger vehicles, just like automakers, face pressure to reduce greenhouse gas emissions. In California, the largest auto market in the US, recently passed laws requiring all medium and heavy-duty trucks to have zero emissions by 2045, a move that could be replicated by nearly a dozen other states.

Electrifying Commercial Vehicles
Electrifying Commercial Vehicles

In addition to state-level incentives, the federal government is proposing new incentives for manufacturers to build domestic battery and component plants, which partners should take advantage of.

Ramsey explains that the decision to use LFP instead of lithium-ion cells, typically used in electric vehicles, was due to its relatively lower cost. Although it has lower energy density compared to lithium-ion, LFP does not use valuable cobalt and is expected to prove more durable over time.

Another significant advantage of LFP battery chemistry is its reduced heat generation and lower fire risk compared to lithium-ion cells, a concern for both vehicle and truck manufacturers. Electric truck startup Nikola faced setbacks this year when it had to recall all of its semi-trucks to address overheating battery issues.

Electrifying Commercial Vehicles
Electrifying Commercial Vehicles

The Cummins-Daimler-Paccar joint venture may face delays in getting off the ground due to one of its partners, EVE, being a Chinese company. The companies mentioned in an email statement that the Committee on Foreign Investment in the United States, or CFIUS, will review the deal to ensure that there are no issues with EVE’s participation.

“For this LFP chemistry, EVE has a really critical solution and manufacturing expertise,” Ramsey told Forbes. “This is about building a plant here, establishing a supply chain, and generating employment opportunities for Americans.”

Last year, almost every other major new North American battery plant announcement has focused on lithium-ion cells, whereas Ford announced a $3.5 billion investment in a new factory in Michigan that will produce both LFP cells and nickel manganese cobalt lithium-ion batteries. This project relies heavily on a Chinese partner, Contemporary Amperex Technology Ltd., or CATL, the world’s top battery maker for LFP cells.

Each partner will decide how to utilize the cells in their products. Ramsey mentioned that Cummins’ Accelera could focus on stationary energy storage systems as well, alongside buses and medium-duty trucks. Freightliner, the truck-making division of Daimler, and Kenworth and Peterbilt, both owned by Paccar, will use them in trucks.

Ramsey stated that, in terms of scale, the new plant’s 21-gigawatt-hours output could provide enough batteries in a year for 80,000 medium-duty trucks or 40,000 electric buses.

Besides batteries, Cummins, Daimler, and Paccar are also working on hydrogen fuel cell systems and trucks. While working with the technology is challenging, hydrogen fuel cell systems are expected to offer longer driving ranges and quicker refueling times for long-haul semis.

On Wednesday, Cummins’ shares rose 1.7% to $235.69, while Paccar’s gained 1.3% to $82.75. Daimler’s truck unit rose by less than 1% to 31.99 euros.

For Business Persons: A Guide to Launching a Profitable Income Business

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- The True Life Story - spot_img

Most Popular

Recent Comments

Billie Eilish's Heartfelt Concern Navigating Fame Spotlight on The Game Awards 2023 Nominations: Alan Wake 2 and Baldur’s Gate 3 Lead the Gaming Excellence
Timeless Excellence: Marbella's Luxury Beach Resort Keeps on Disney Earnings Triumph: Expanding Cost-Cutting by $2 Billion, Surpassing Profit Expectations