Accelera by Cummins, Daimler Truck and PACCAR Select Mississippi for Battery Cell Production in the United States
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The establishment of a 21-gigawatt hour battery cell manufacturing facility in Mississippi by a joint venture between Accelera, Daimler Trucks & Buses US Holding LLC and PACCAR marks a significant step in the commercial electric vehicle (EV) sector. The localization of battery production is a strategic move to secure the supply chain and reduce dependency on overseas manufacturers, particularly in light of recent global supply chain disruptions. The projected creation of over 2,000 manufacturing jobs suggests a positive impact on the local economy and underscores a growing trend in the automotive industry towards investment in domestic manufacturing capabilities.
The focus on lithium-iron-phosphate (LFP) battery technology is noteworthy as it offers a cost-effective alternative to other lithium-ion chemistries, with added benefits of safety and longevity, which are critical in commercial transportation. The choice of LFP over nickel-manganese-cobalt (NMC) or nickel-cobalt-aluminum (NCA) chemistries reflects a strategic decision likely based on these advantages and the relative stability of iron and phosphate prices compared to nickel and cobalt. This could potentially lead to more stable pricing for commercial EVs and might influence the competitive landscape of the industry.
The joint venture's commitment to aligning with the Paris Climate Agreement and focusing on decarbonization aligns with broader environmental policies and market trends towards sustainability. The transition to zero-emissions technologies in the commercial vehicle sector is a critical component of reducing transportation-related carbon emissions. The investment in a new battery cell factory dedicated to electric trucks could accelerate the adoption of EVs in medium- and heavy-duty transportation, which has been slower compared to the passenger vehicle market due to range and payload constraints.
By localizing production, the joint venture is also potentially reducing the carbon footprint associated with the transportation of battery cells. This move could set a precedent for other companies in the industry to follow suit, amplifying the environmental benefits. Furthermore, the partnership with EVE Energy, a leader in LFP battery cell technology, suggests a focus on innovation and high-performance battery solutions, which could further enhance the environmental impact of the joint venture's products.
The financial implications of this joint venture are multifaceted. The investment in a new manufacturing facility signals confidence in the growth potential of the commercial EV market. The scale of the operation, with the potential for expansion, indicates that the companies anticipate significant demand for electric trucks in the coming decades. This could have a positive effect on the stock performance of the companies involved if market expectations align with their growth projections.
However, it's important to consider the capital expenditure required for such a facility and the impact on the companies' short-term financials. The timeline for production starting in 2027 suggests a long-term strategic investment, with benefits likely realized in the medium to long term. Investors will be looking at the joint venture's ability to manage costs, secure supply chains and achieve production efficiency to meet the anticipated demand. Additionally, the involvement of regulatory bodies such as CFIUS indicates that there are still hurdles to be cleared, which could affect the timeline and financial outcomes of the project.
(Graphic: Business Wire)
The planned joint venture between Accelera, Daimler Truck and PACCAR was announced in September 2023 and will create scale to deliver cost effective and differentiated battery cell technology that supports the adoption of electric vehicles for medium- and heavy-duty commercial transportation. Accelera, Daimler Truck and PACCAR will each own
“This site selection represents an exciting and tangible step toward advancing our Destination Zero strategy and our vision to lead the industry toward a decarbonized future,” said Jennifer Rumsey, Cummins Chair and Chief Executive Officer. “We are excited to join the
“Localized battery cell production is an important component of delivering our customers – the fleets that keep America and the world moving – cost effective options for decarbonizing their operations,” said John O’Leary, president and CEO, Daimler Truck North America. “We’re grateful to the
“The state, the communities and the people of
Accelera, Daimler Truck and PACCAR are leading the commercial vehicle sector’s transition to zero-emissions technologies. The partners are committed to reducing carbon emissions consistent with the Paris Climate Agreement.
The transaction is subject to customary closing conditions and receipt of applicable merger control and regulatory approvals, including the submission of a voluntary notice to the Committee on Foreign Investment in
About Accelera™ by Cummins [NYSE: CMI]
Accelera by Cummins provides a diverse portfolio of zero-emissions solutions for the world’s most economically vital industries, empowering them to accelerate the transition to a sustainable future. Accelera, a business segment of Cummins Inc., is both a components supplier and integrator, focused on batteries, hydrogen fuel cells, e-axles, traction drive and electrolyzers. Accelera currently has operations in
Cummins, a global power technology leader, is a corporation of complementary business segments that design, manufacture, distribute and service a broad portfolio of power solutions. Headquartered in
To learn more about Accelera by Cummins, visit accelerazero.com.
About Daimler Truck [DAX: DTROCK]
Daimler Truck Holding AG ("Daimler Truck") is one of the world's largest commercial vehicle manufacturers, with over 40 main locations and more than 100,000 employees around the globe. The founders of Daimler Truck have invented the modern transportation industry with their trucks and buses a good 125 years ago. Unchanged to this day, the company's aspirations are dedicated to one purpose: Daimler Truck works for all who keep the world moving. Its customers enable people to be mobile and get goods to their destinations reliably, on time, and safely. Daimler Truck provides the technologies, products, and services for them to do so. This also applies to the transformation to CO2-neutral driving. The company is striving to make sustainable transport a success, with profound technological knowledge and a clear view of its customers' needs. Daimler Truck's business activities are structured in five reporting segments: Trucks North America (TN) with the truck brands Freightliner and Western Star and the school bus brand Thomas Built Buses. Trucks
About PACCAR [NASDAQ: PCAR]
PACCAR 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 vehicles combine state-of-the-art diesel and zero-emissions powertrains with comprehensive PACCAR charging solutions and infrastructure support. PACCAR also provides financial services and information technology, and distributes truck parts related to its principal business.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240117979244/en/
Accelera by Cummins Media Contact:
Jon Mills
+1-317-658-4540
jon.mills@cummins.com
Daimler Truck Media Contact:
Anja Weinert
+1-669-600-1478
anja.weinert@daimlertruck.com
PACCAR Media Contact:
Ken Hastings
+1-425-468-7530
ken.hastings@paccar.com
Source: PACCAR Inc
FAQ
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