Volvo, Daimler Truck sign binding agreement for joint venture

As announced in May this year, Volvo (VLVLY) 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 companies 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. 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.