Dear, ladies and gentlemen, welcome to the conference call of Volvo Group and Daimler Truck AG. At our customers' request, this call will be recorded. After the presentation, you have the opportunity to ask questions. May I now hand you over to Florian Maarten, who will lead today's conference.
Good morning, and a very warm welcome, everyone, to the joint global conference call of Volvo Group and Dynatruck AG. We appreciate that you have dialed in from all around the world despite the short notice. You have most likely seen our press release we sent out earlier this morning by now, so you already know what this conference call is all about. Volvo and Daimler Trucks are teaming up to move fuel cell technology at the forefront for CO2 neutral transportation. And I'm very happy to introduce to you my colleague, Kina Willeke, Head of Group Communications Volvo.
Hi, Kina. Good morning, and thanks for taking over now. We're really thrilled to jointly announce our strategic partnership today.
Thank you, Florian, and good morning, everyone, and a warm welcome also from my end. We are, of course, extremely excited today about the announcement, which involve the CEOs of both our companies. And on the line today to speak, we have Martin Down, the CEO of Daimler Trucks and Buses and we also have Martin Lundstedt, President and CEO of the Volvo Group. What we will do is that we will start with a brief intro statement by our CEOs and it will be followed by a Q and A session. And the operator will come back and explain the procedure for this later on.
Now, Martin Lundstedt, why don't you start? Please go ahead.
Thank you, Tina. And also from my side, a warm welcome to all of you. And I'm, of course, glad that you found the time to join us. And I hope that all of you on this call are staying safe and healthy in these challenging times. Our everyday lives have been very difficult and different during the past weeks, impacted by the COVID-nineteen virus outbreak.
And of course, that goes very much for our businesses as well, even if we are supporting society critical activities. At the same time, we have not lost our sight of long term strategic objectives of our industry and for society. And the number one issue still being climate change and reducing humanity's carbon footprint. We need to drive sustainable transportation to the next level. Today's announcement is proof of our determination to contribute to this goal.
We know that transport and logistics is a key enabler for societies to grow and prosper, and we know that the need for transport will increase with a growing world population and also urbanization. We must meet that need with solutions that are more sustainable than today's. Electrification of road transport is a key element in delivering the so called Green Deal, a carbon neutral Europe and ultimately a carbon neutral world. Using Hydrogen as a carrier of green electricity to power electric trucks in long haul operations and also for other applications like buses, construction equipment and the industrial segment is an important part of the puzzle and a complement to battery electric vehicles and renewable fuels. Decarbonizing our industry is a massive undertaking and no company will be able to do everything on their own.
Partnership is the new leadership. It will be about working with the right partners in specific important areas. That is why I'm very happy about today's announcement. Together with Daimler Truck, we intend to form a joint venture for the development and large scale production of fuel cells. Daimler is one of the global champions in our industry, and we are very proud to have Martin down and his team as a strategic partner in the fuel cell area.
It is important, however, to be clear about a few things. First, the joint venture still needs to be approved by the appropriate authorities. And second, while we plan to partner in fuel cell technology, we will, of course, remain competitors in all other areas. Having said that, we share the same vision of a transformation towards sustainable transport solutions. And by working together in this specific area, we will be able to progress faster.
That is good for both our customers, but even more importantly, for society as a whole. And with that, I would like to hand over to Macken Down. So please, Martin.
Yes. Thank you, Martin, and good morning to everyone, and thanks for dialing in because today is a very special and significant day for the future of transportation. I've been in this business for 30 years, and I can honestly say that announcing this partnership is one of the highlights of my career. I dare to call it a historic day for trucking. And let me explain me why, three things.
First of all, with Volvo and Daimler, 2 long time established distinguished truck makers are joining forces in a crucial future technology. Together, we can progress so much faster. We want to move the fuel cell technology into high volume production in the second half of twenty twenty, and we want to do so with the quality, reliability and durability that our commercial vehicle customers expect from all of our products and technologies. In doing so, we aim to create acceptance for and trust in fuel cell technology in our society because that trust and engagement from other actors will be key in order for the vision of sustainable transportation to become reality. 2nd, we are not starting from scratch today at all.
We rather build upon a reliable, available and mature foundation. Because at Daimler, we have a long history of research, development and production of this technology with millions of kilometers already driven in passenger car and commercial vehicle applications. Trucks and buses are literally the perfect carriers to put this technology now into serious production vehicles. And third, apart from increasing our speed to market, this joint venture also helps both of us to shoulder the substantial investments we will have to make in the coming years. Teaming up will create scale effects as well as other efficiencies, which are indispensable for the fuel cell to become commercially viable within our ambitious time frame.
Regarding to the current economic downturn, this aspect of our cooperation becomes even more important. As you can see, these are all good reasons for both TimeLine Volvo to work together in this area, even though we are and we will remain natural competitors in all other aspects. In addition to the announcement about our planned joint venture, I'd like to inform you on the organization setup we are installing within Daimler to make all of this happen. We will bundle all of our Daimler wide fuel cell competency and capacities within Daimler Trucks. To that end, we will establish a new entity called Daimler Trucks Fuel Cell.
As Martin Lundstedt lined out, the fuel cell will be key to reach our target of CO2 neutral transportation. We need this technology in addition to battery electric vehicles. Due to the strategic relevance for heavy duty commercial vehicles, Daimler Trucks will be taking the role the leading role within Daimler NG for this technology. In our new unit Daimler Trucks Fuel Cell, we will include teams of Mercedes Benz Fuel Cell in Arbonne, Mercedes Benz Canada FuelCell and members of today's passenger car Mercedes Benz AG. Over the past years, these colleagues have gained vast knowledge on the development and production of fuel cell systems for various vehicle applications.
We are happy to bring these assets into the joint venture. Daimler has invested heavily in the past in this technology, and Daimler Trucks like Volvo will continue to invest heavily as we develop and manufacture serious production fuel cells. Ladies and gentlemen, let me sum it up. Making fuel cell technology work is no small undertaking for any one company. Thus, we are convinced that combining the experience of both Daimler and Volvo is the right thing to do for us, our customers and for society as a whole.
We are very much looking forward and I am very much looking forward to work together with Martin Lundstedt and his team. The signing of today's agreement is also a call for action to others. We made our move to show our commitment to this technology. Now it's up to others to join us. In order to make CO2 neutral vehicles competitive, we need regulatory and governmental steering measures to improve the business case for our customers, including the crucial infrastructure for generating, storing and distillate in hydrogen.
We will not be able to accomplish this task alone. But today, we have very strongly and jointly made the first bold move to get us going. Having that said, I think we are all ready to take your questions. Thank you.
And we received the first question from Erik Paulsen, Pareto Securities. Your line is now open.
It's Erik Paulsen at Pereto Securities. I have two questions. The first one is on infrastructure because this is sort of an egg and hand problem here regarding infrastructure and the fuel cells. You need both the infrastructure and you need also the fuel cells to be able to have this to work. But here, what you see and what you believe is needed in terms of infrastructure for green hydrogen going forward and also hydrogen refueling?
That is the first question. And the second one is for Volvo. You had earlier smaller development regarding fuel cells, but you later on, I think, divested that part and that's what become later on power cell. What's that decision based on? And what have you done in house up until this date since then?
Martin, I would say start you with both questions.
Okay. Thank you, Martin. So Martin Lustiger from Volvo. On the first question regarding infrastructure, that is correct that, obviously, this is going hand in hand as we have seen also for other type of deployment of new type of powertrain technologies, may that be historically LNG or electromobility or other types of that. And in this sense, we see this announcement as a very, very important statement to get things moving.
What we see is obviously that in the commercial vehicle arena, both when it comes to trucks but also to other applications, it is, in a way, more stringent to gradually build up this because you will have the ability to concentrate around bigger goods flow for the long haul operations and then gradually build it up. And also, when it comes to the production of fuel cells, it can take place in many different forms, obviously, everything from large scale to the small scale generation at spot also with renewable electricity. So from that perspective, it is a flexible system. But you are correct, obviously. This is one of the key parameters now during this announcement that we are calling for actions, both from the public and from governments to drive this forward because in order to complement the battery electric movement to complement that with fuel cells on an electric driveline will be the key.
And that goes for their production, the infrastructure, the refueling and, of course, the technology on the equipment side. On the second question, it is true that we were investing in Power Cell up to a couple of years ago, and then we divested that. We have continued, of course, the application development in the Volvo Group since. We have been clear about that fuel cell will be 1 piece of the puzzle, and we have gained a lot of experience in all our different applications. And now when we are seeing the commercialization and the visibility for the coming decade, We have been thoroughly investigating what is the right partnership for us, both when it comes to technology with the right power levels and continuous generation of electricity and also the durability of the technology.
And in that aspect, but also with the ability to do a large scale industrialization to get, so to speak, also the commercial conditions right in order to compete with diesel and other type of technologies. We have come to the conclusion that this setup is very, very attractive for Volvo, but it's also very, very attractive for our customers and societies. So we are getting the right balance when it comes to time to market, scale and thereby also competitive offering that can drive, so to speak, the shift into a CO2 neutral society.
Thank you. Just a brief follow-up there on the infrastructure side. Do you plan to invest anything on the infrastructure side coming going forward now in this joint venture? Is it only on the equipment side of the fuel cells?
Yes. To follow-up on that, so this joint venture is about the development technology development, the industrialization production of fuel cell systems. That is then, of course, a core component, but then should be implemented in different type of applications at Volvo or at Daimler or at other interested parties down the road. So those are the fuel cell systems we are talking about on board, so to speak.
Okay. Thank you very much.
The next question we received is from Ilona Wissingbach from Reuters. Your line is now open.
Yes, good morning. I would be interested if the €600,000,000 that are invested or are paid by Volvo will be invested into the joint venture? Or what would be an investment amount that is planned? So far, I think we haven't got very precise numbers on the side of Daimler yet. And when you call for the public to support this endeavor.
How do you see the perspective for state subsidies in building up this infrastructure because this is already a longer standing point that is raised by the industry? And the third question is, what role did Geely play? Is this a project well in all this work program of Daimler and Geely to find common projects?
Martin, I tried to answer, but you can chime in as well anytime. Let's start with the last one because it's the easiest one. Geely has nothing to do with it. It's absolutely it's neither a joint project nor was Chile in any way involved into that doing. And because it's not the public information, I don't think even that GD was informed about that thing as the general public wasn't informed before we today is the time when we inform the public.
Secondly, the infrastructure side, yes, there is a long standing demand that we need a hydrogen infrastructure. But for us, it was important to do the first step. And someone else used to face hand ache problem, yes. So let's be us, the starting point. And it takes its time until the technology is serious production ready.
So nobody should now waste their time in building up a respective infrastructure. But now it comes to your last question. Daimler is forming a fuel cell entity, legal entity. Into that entity, we bring everything we have in the last 25 years accomplished in fuel cell. The people, the know how, the IP rights and the production infrastructure that we have that helped us to produce a couple of 100 pass cars and to power a sizable amount of city buses.
So we bring those things into one company. Volvo is purchasing 50% of that company for €600,000,000 slightly above €600,000,000 We both parties agreed that we significantly will invest in the future. And it will be from both sides. At Kari, because we are fifty-fifty, it will be 7, 8 will be a 9 digit amount of money that will flow start to flow immediately, and it's more necessary until we are ultimately ready to have that technology growing in the marketplace.
That was a 9 digit amount of money?
Yes. From both sides, each at least.
The next question we received is from William Baughton with Wall Street Journal. Your line is now open.
Hi, thank you for taking my questions. I just have 3 quick questions. 1, in terms of employees, how is the how many employees is the company going to have when it starts? And the second, will you give a what's your vision in terms of a roadmap for the deployment of fuel cell infrastructure and vehicles? I mean, when will we see fuel cell fleets operating on the highways?
What will that look like? And my last question is about other partners, whether or not you're open to other partners. We have some manufacturers like BMW that have made fuel cell more of a priority over the last year or so. Are you open to more cooperation with or are you open to other companies joining the venture? Thank you.
Martin, the quote?
Yes. To start with if I start with the first part of the question, it's approximately 250 employees and experts that will be, so to speak, starting in the joint venture now when that is or in the entity of Daimler truck fuel cell to start with and then eventually moving into the joint venture structure when Volvo is coming on board after also the necessary clearance with authorities, etcetera. So approximately €250,000,000 But of course, our vision going along as this will continue to be developed, we have to evaluate what is the right level, both when it comes to the development technology area, but also when it gradually moves into the industrialization area. But that is the starting point. When it comes to the road map, we have been very clear that this is a very important part of the road map up to 2,030 primarily to reach also a sustainable level when it comes to the CO2 targets for Europe, but also for other parts of the world and not at least then for heavy applications and long haulage and long distance and other applications where a lot of energy is required onboard the different type of applications.
And therefore, we are foreseeing a gradual commercialization and deployment during the later part of this decade. And then coming back to Martin's statement before, that's the reason why it has been very important to have a consistent and common view about how we foresee the investments moving forward here. So we can really keep the line the investments moving forward here, so we can really keep the line and make this very viable part of future green transportations and not at least then as a strong sign similar to Martin. I've been 30 years in this industry and 1990s. But for the first time in my career, it's sooner than 10 years away.
And this is a very, very strong sign and call that in order to make the shift, we need to make the shift together with a lot of other partners in the network, not at least when it comes to infrastructure and production of hydrogen. Then when it comes to partners, as I said, we are we have a fifty-fifty joint venture agreement. That is the starting point, the setup of developing and industrialized and commercialized fuel cell systems allow, of course, an opportunity also to deploy this to other actors, if that is an interest of that because our intention is to buy this technology that we are deeming to be in the forefront for these type of applications to deploy that so we can get the large scale necessary to get the business case viable for our customers and for society.
And I can only support that. What Martin just said is this joint venture company will produce a fuel cell stack in an aggregate that goes in both of a Daimler truck and a Volvo truck and it can go in other vehicles as well or we can think in off highway usage like power generation and so on. So we want to establish here a company that serves not just the 2 shareholder, but why not the entire industry. But this first serve the shareholders and do a great job here and then the rest will fall in place. Our clear target is to have the most competitive, the most capable fuel cell system in the market, and we can build upon a readily available technology.
So the next question is from Christoph Hornberg from Bloomberg News. Your line is now open.
Yes, good morning from Frankfurt. Thank you for hosting this call. I just have one quick follow-up question, please. The release you sent out suggests that geographically, the joint venture will be focused primarily on Europe. Would the technology also be considered for other regions potentially given that both Diamond Trucks and Boho have a strong footprint, for example, in America.
So would potentially be a use case in America something that you could envision? And would that also be an option for China, including your respective joint venture partners? Thank you.
I mean, definitely, Iman, we have both on the truck side, both Volvo and we have the same strategy that our trucks on both sides of the ocean have the same technical DNA. So what works in one truck always works in the other truck. And secondly, our fuel cell joint venture will have a significant subsidiary in Vancouver, BC, Canada. So we already have our foot on the North American continent. And whenever regulation and environment necessities are right, we'll certainly can see that on the other side.
On the other side, and I think that was from the get go with Martin Lundstedt and me always made it easy when we debated. We have one basic principle, focus on one thing and do it right. And if you do that one thing right, then a lot of other things automatically will fall in place.
Okay. Thank you.
The next question we received is from Waldemar Looneroth from Guttborg Post. Your line is now
open. Yes. Thank you. I would like to ask them because some questions have already been stated here. But this cooperation, how much is it a fact how much is it due to the coronavirus crisis?
Were you in negotiations with this joint venture before? Or how much is it due to the crisis that we've all seen on the global pandemic? Thank you.
Thank you. Waldemar, Martin here. Martin Oosted here. Yes, we are fast, but we are not that fast. So this is, of course, a work that has been conducted before.
This is the type of long term direction and investment that requires, I mean, in-depth discussions and understanding, of course, about technology business model setup, but more importantly also about common values, how to drive a transformation of this magnitude because we are talking about game changing transformation for transportation and thereby for global societies that is needed. We know that we cannot just continue on the trajectory that we have had when it comes to transportation, giving increased population, increased density in urban areas, but also increased goods flows, thanks, for example, to increased trade and e commerce. And thereby, we see that we are we need to continue to invest heavily in technology. And we have said that if Europe ought to continue to be a leading actor when it comes to the heavy transportation, you need to be leading in the green shift and the truly green shift. And electromobility is that's the cornerstone.
Battery electric will be complemented by fuel cells. And to do that, you need also to shift it into the infrastructure and upstream production of it. So this has been ongoing for a while. And if anything, as Martin Down pointed out, the coronavirus has just convinced us even more because prioritization will be even stronger after this very difficult situation. But this is an area that needs continuous focus and thereby having the right type of setup.
So how long has these negotiations been ongoing then?
We do not comment that exactly, but it has been ongoing for a while in order to get things right and to really share a setup that will be consistent and have the right prerequisite to be long term viable.
Okay. Thank you.
The next question
Mr. Dam, for what range of heavy transport do you command fuel sales deck for what size or? And will it also be usable for light trucks, for example? Or is it specially designed for Will it be specially designed for heavy trucks?
Look, you can say it's actually a fuel cell truck and a battery electric truck above electric trucks. So there is electric current going into an electric engine, going to electric axle and propel a truck forward. The question is, do you get your energy out of stored energy, a battery or do you produce it basically on the truck? And you can say rule of thumb is as longer the route and as heavier the load, it's more likely to generate it on the truck because battery does not have the necessary density of energy to store. And so it means on the other side, it's shorter the route and it's lighter the lower load as more likely you use a battery.
And everything else depends on infrastructure on a lot of things. Trucks are specifically designed vehicles, and though both are necessary, and we'll have to figure out that in the future, how infrastructure develop, how lead environmental restriction go on, how raw materials are developing. There's a lot of open questions, which then will determine in future, which is the share of our technology.
The next question we received is from Harry Prepsler, Stuttgart Arteitung and Stuttgart Arneghen. Your line is now open.
Yes, hello. Good morning. I have three questions for Martin Down. First question is what happens with the cars with fuel cells? Will you stop producing the GLT fuel cell?
And will you stop developing more cars? 2nd question is where will be the headquarter of the joint venture? And third question is, I didn't really get the point how much you want to invest. So could you say clear how many money do you want to invest in how many years? Thank you.
Abreza, Thanks for the question. First of all, the GLC project, car project is nearly done as we speak. The last year, these fuel cells will be produced and handed over to customers. At the moment, we don't plan another car. Car is focusing on battery.
Here, the same rules of physics applies as lighter the load is as shorter the distance. And when we talk distance in truck, we talk really distance, yes? This is not what a pace car guy other than going into driving to vacation is doing during a day. So on the car side, we don't have plans for the moment, but we have all the possibilities to come back anytime if there is a market and a necessity. So it's a good and seamless transition from one application to the other.
And in the past, we're in the truck side. We're always part of the fuel cell project, especially with our bus division. The headquarter of the new unit will be in Nabon, where we have today, let's say, the core of our expertise for fuel cells, and we want to keep that for the joint venture as well. With the Invest, it's difficult to give precise numbers. But it will be a lot, and we certainly, on the one side, try to minimize it as much as possible.
When I spoke of 9 digit numbers, that means EUR 100,000,000. Each means EUR 200,000,000. That's a good starting number, but it definitely won't be enough to have at the end full serious production. So we will have to spend quite some money to make it happen, but both parties have the willingness and the key understanding that we are doing that in the next 3, 4 years. And we'll certainly, Mr.
Brestler, keep you informed whenever we have more precise numbers. Okay. Thank you.
The next question we received is from Benjula Costa, Goldman Sachs. Your line is now open.
Hi, good morning. I only have one question left, and it's on the Volvo side.
I was wondering, Martin, if you could
give us any guidance on how
you came up or jointly, how you came
up with the EUR 600,000,000 cash rent, I guess. How do you think about valuation in a business like this where the business actually hasn't started? Thank you.
Thank you very much for the question. And obviously and I think also partly Martijn Dammer has been into that. And also from my side, we have been working now during a period of time to do, so to speak, the different type of due diligence that is, as we deem, impossible to be done up to this part of the process, given the fact that we now are announcing and are also starting the normal proceedings with the concerned authorities. But of course, this is, as always, when it comes to these type of investments, a mix between the value that we put into the technology, the IP portfolio, the readiness, the technology characteristics, but also on the way forward of the ability to industrialize and to make it successful and in comparison with other alternatives for us when it comes to getting to a level where fuel cell that have to play an important role in the CO2 neutral society. And when we are mixing that, I will not go into the exact details we have concluded on this valuation.
The next question we received is from Megan Lambemann from Automotive. Your line is now open. Yes, thank you. I was interested hearing about key metrics. Are you aiming in the long run for a fuel cell truck that can best diesel on all counts in terms of performance and cost, etcetera.
There is another player out there that is claiming to do this. And I'm interested in whether you have a similar approach or whether you expect there to be some compromise. And I'm also interested in whether you expect to make a loss on your initial models and how long before they would be profitable?
Could you please repeat the last question, please? I got the audio was a little bit compromised.
Yes. I'm interested on whether you expect to see a loss on the initial models and how long before they would be profitable.
I mean, the first question is easy to answer. We to fulfill the Paris Accord 2015, we can't sell any more combustion engines. And in my opinion, that has to be started as early as 2,040. Otherwise, we don't limit the warming of our planet, especially because trucks have a pretty long lifespan running for at least 10 years. So we have to find CO2 neutral solutions for all types of truck applications.
And that is, let's say, for 95% or the majority of all applications. And therefore, yes, a fuel cell truck has to deliver the same performance in durability, the same performance in torque and strength and the same performance, ultimately, in efficiency than a diesel drug has. The last one is potentially the most difficult one, but we have and therefore, we for me, for the foreseeable future, it will be more expensive. So we'll have to see how regulation develop and how that is there. And it will be always an electric truck.
And the question is, is electricity coming out of the socket in the battery Or is it produced through hydrogen in the truck itself? And so yes, I'm pretty optimistic that 20 years from now, this will cover the entire market in 95% of the applications.
And maybe, Martin, you have to complement from my side. And I think that is also the reason for the construct of the joint venture that this is about the development of the fuel cell stack and the deployment of that. And that is the joint interest to drive volumes in order to get both the right performance and the right, so to speak, input levels. But then it is the deployment that goes for the different parties in order to make a competitive application into respective vehicles or other applications. And we think that is a construct that will drive both economic efficiencies for society and for customers, and it will drive also sustainability efficiencies for society.
And that is the reason of having a construct of this sort in the joint venture.
Okay. Thanks. The next question we received is from Nikolaj Kams, Deutsche Bank. Your line is now open.
Yes. Nikolay Khem from Deutsche Bank. I have 2 follow-up questions. So the first one would be, if you can make a wish for the government to help you in this joint venture, what would it be? A large infrastructure, comm standards or purchase incentives for fuel trucks?
And the second one, in which year would you expect to have the 1st truck with this technology on the road?
I would say, Martin, I'll go first, and you but you add to that. For me, the first thing is government certainly is asked when it comes to infrastructure because it is a huge endeavor, especially if we talk about green hydrogen. That means hydrogen solely produced out of renewable energies. Subsidies itself, I would say, it's never a good solution if you subsidize something. It has to be ultimately an economical solution.
That means the only subsidies I could see is for a couple of first seeding trucks. So people start getting making their experiences with trucks and infrastructure is not perfect, and you basically lose money with those trucks. But when they become a household, good in the mid of the second half of this decade, then it has to be a business case for our customers without subsidies. And the last one is when do we go on the road. This is in our business always there are 3 phases.
It's always a starting phase where you have a couple of trucks out. So you gain the first experiences. Then you have a kind of pre serious phase where you have limited applications in limited areas, a limited number of trucks that is at the moment but our passenger car colleagues are doing with the GLC, which is a true and serious production. But the real thing you are striving for is what I call CAS production. That means any number of trucks, any region in Europe, whenever the customer orders, we or Volvo delivers.
And that will take a little bit longer than the first two. I would say the first two, we want to have as fast as possible. That means potentially as early as 2024, 2025. The second one will take until the mid of next decade. Martin, what's on your view?
Future oriented statements sometimes have different opinions. Therefore, what's your opinion on that?
No. But again, what I think is important is that we are stating that we are building on from a basic technology, both experience and competence, a technology level that is, I should not say, mature from a serious production, but it's starting to be visible from durability and from power outputs, etcetera. So it's starting to be seen as a truly viable option for the road up to 2,030. Here.
Great, clear. Thank you.
The next question we received is from Edward Taylor from Reuters. Your line is now open.
Yes, thank you for letting me ask a question. Can you just talk a little bit about what has driven you to decide that now is the era of commercializing hydrogen fuel cell trucks? Is it just the pressure to meet your CO2 rules? Or do you see a sort of a broader market where you can license the products to other third party manufacturers? And is there a lockup agreement for you to keep the fifty-fifty stakes for now?
If I may start, Martin, I will say, of course, a very important element is the different roadmaps of CO2 regulations. But I think also to be fair, when we are looking into our customer base, but also our customers' customers and society as a whole and also our own employees, that is a real driving force of being part of the solution. Transportation will play an essential role to achieve the commitments that all of us have put up when it comes to the Paris Agreement and beyond. And in order to reach those levels, we need to get started when it comes to the long haul and the most heavy applications to complement the battery electric vehicles when it comes to electric powertrains. And therefore, it's a combination between, so to speak, the legislative landscape in certain regions, but it's also the willingness to drive true transformation into our industry because that will be a competitive edge for anyone that is participating.
Secondly, I think it's also important to understand that the ability of generating green electricity is improving every day, both when it comes to solar, when it comes to wind, when it comes to other sources. And by that, you will also find new solutions, both when it comes to small and large scale generation of electricity that can actually power the process of generating hydrogen in different forms and thereby also finding a mix of the infrastructure and the upfront production of hydrogen, so from a green basis. And that development in conjunction also with the Readiness and the development of the fuel cell technology as such and the readiness of having electric powertrains to host, so to speak, this type of energy layer has driven us at least to come to the conclusion. This is the timing now.
Okay. I mean, but Bosch has started producing their own fuel cell systems. Was there a fear that basically you could miss out on a business opportunity? Is that why you're jumping on it now? It's competitive pressure as much as anything else.
I would say we put as much competitive pressure on our on the all other players in the market. And they as they put pressure on us, this is the essence of our 3 markets. And that is what has driven the industry for the last 100 years, and it will be something which will drive that industry for the next 50 years. And we have certainly, and I would say the success of both our brands move that over and over that we have solved transportation challenges fairly well in the past. And therefore, most companies are pretty healthy at the moment.
And I'm pretty confident that we continue that into the future. This is a very long term commitment both parties are doing. And I am and it's the same thing I've said in other areas as well. And sometimes I meant that in this case, even Volvo. I'm never afraid of anyone in the market, but I'm never so arrogant that I don't take someone on sale.
Enough. And that's the same thing here. I'm not afraid of any other person or company, and I'm not too arrogant that we think we have it alone.
You said it was a long term commitment. Is there a lock up agreement? And how long is the long term commitment?
Long term is really long term. Long term is beyond the 2 martins in this thing can think at the moment, yes? This is very long.
Thank you very
much.
So we received no further questions. I hand back to Florian Martens for closing remarks.
Yes. Thank you very much to the operator and everybody involved in making this call happen, and thank you very much to all of you for dialing in and engaging with these many questions. Of course, the communications teams of Volvo and Dynatrucks remain at your disposal to further clarify your interest and questions after this call. Again, we'd like to thank you for taking the time today. Have a great day, and please stay safe and stay healthy.
Thank you very much.
Bye bye.
Ladies and gentlemen, thank you for your attendance. This conference has been concluded.