Volvo Group and Daimler Truck sign binding agreement for joint venture to develop software-defined vehicle platform

Rhea-AI Summary

Volvo Group (VLVLY) and Daimler Truck have signed a binding agreement to establish a 50/50 joint venture focused on developing a software-defined vehicle platform for heavy-duty vehicles. The new company, to be headquartered in Gothenburg, Sweden, will develop a truck operating system and offer brand-agnostic products to other commercial vehicle OEMs. The joint venture will create centralized high-performance control units and develop an operating system enabling wireless 'over the air' updates. The transaction is expected to complete in H1 2025, subject to regulatory approvals. Both companies will remain competitors in all other business areas.

Positive

• Strategic partnership with industry leader Daimler Truck
• Potential for additional revenue through licensing to other OEMs
• Development of new technology enabling over-the-air updates and enhanced connectivity

Negative

• Significant investment required for joint venture development
• Regulatory approval pending and could delay completion
• Competition in software platform space from other manufacturers

• Volvo Group and Daimler Truck have signed a binding agreement to establish a new 50/50 joint venture to develop a software-defined vehicle platform for heavy duty vehicles and drive the industry transformation.
• The new company aims to set an industry standard with headquarters in Gothenburg, Sweden.
• The common goal of the partners is to develop a truck operating system and to offer the joint venture's brand- and versatile application-agnostic products to other commercial vehicle OEMs.
• Volvo Group and Daimler Truck will remain competitors in all other business areas and will continue to focus on an independent product and service offering, including the respective differentiating digital customer offerings.

GOTHENBURG, Sweden and LEINFELDEN-ECHTERDINGEN, Germany, Oct. 28, 2024 /PRNewswire/ -- As announced in May this year, Volvo Group and Daimler Truck intend to create a joint venture to develop a common software-defined vehicle platform and dedicated truck operating system, providing the basis for future software-defined commercial vehicles. The two leading companies in the commercial vehicle industry have now signed a binding agreement to establish the joint venture and are working towards setting up the company that will be headquartered in Gothenburg, Sweden.

The software-defined vehicle platform will enable Volvo Group and Daimler Truck and potential other future customers of the joint venture to provide stand-alone digital vehicle functions for their products. 

Leading the digital transformation

"The signing demonstrates our joint commitment to lead the digital transformation of our industry. The software and hardware from this joint venture will be crucial for achieving unprecedented levels of safety, comfort, and efficiency for our customers," says Karin Rådström, CEO of Daimler Truck.

Martin Lundstedt, President and CEO of the Volvo Group, adds: "We are joining forces to redefine software architecture and pioneer a new era of self-optimizing trucks. Together we are removing complexity to allow our customers to unlock higher levels of connectivity, safety and efficiency and continually push for a greater performance. It is a revolutionary response to the challenges of our modern world, and we are proud to be setting the industry standard."

The joint venture's activities will include the specification and procurement of centralized high-performance control units dedicated for commercial vehicles and capable of handling large amounts of data. The new company will develop an operating system and tools which vehicle manufacturers can use as a basis to develop their own differentiating digital vehicle features. This will decouple software and hardware development cycles in the future and enable customers to purchase and update digital applications wirelessly 'over the air', ultimately enhancing customer efficiency and experience. 

Volvo Group and Daimler Truck will remain competitors and continue to differentiate their complete product and services offerings, including their respective digital solutions.

The transaction for the joint venture is expected to be completed in the first half of 2025, subject to obtaining all required regulatory approvals.

Link to high resolution images

Journalists wanting further information, please contact:
Claes Eliasson, Head of Media Relations
+46 76 553 7229
press@volvo.com

For more information, please visit volvogroup.com 
For frequent updates, follow us on X: @volvogroup

The Volvo Group drives prosperity through transport and infrastructure solutions, offering trucks, buses, construction equipment, power solutions for marine and industrial applications, financing and services that increase our customers' uptime and productivity. Founded in 1927, the Volvo Group is committed to shaping the future landscape of sustainable transport and infrastructure solutions. The Volvo Group is headquartered in Gothenburg, Sweden, employs more than 100,000 people and serves customers in almost 190 markets. In 2023, net sales amounted to SEK 553 billion (EUR 48 billion). Volvo shares are listed on Nasdaq Stockholm.

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https://mb.cision.com/Main/39/4057174/3077590.pdf	Volvo Group and Daimler Truck sign binding agreement for joint venture
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SOURCE AB Volvo

FAQ

What is the ownership structure of the Volvo-Daimler software joint venture?

The joint venture will be a 50/50 partnership between Volvo Group (VLVLY) and Daimler Truck.

When will the Volvo-Daimler software joint venture be completed?

The joint venture is expected to be completed in the first half of 2025, subject to regulatory approvals.

Where will the Volvo-Daimler software joint venture be headquartered?

The joint venture will be headquartered in Gothenburg, Sweden.

What will the Volvo-Daimler joint venture develop?

The joint venture will develop a software-defined vehicle platform and truck operating system for heavy-duty vehicles, including over-the-air update capabilities.