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.