Daimler Truck sets out ambitions as an independent company

In Mercedes-Benz, News, Western Star, Daimler7 MinutesBy NZ Trucking magazineMay 21, 2021

Daimler Truck has set out its ambitions as an independent company and its plans to unlock its full potential, both operationally and financially. 

Looking ahead, an independent Daimler Truck will accelerate its strategic ambitions and address its financial performance. While Daimler Truck is a powerhouse in North America, dominating the region with a 40% market share in the heavy-duty segment and benchmark profitability, its recent record in other market regions is less satisfactory. The inconsistent regional profitability records of Europe, Brazil and Asia need to be improved significantly.

“Our ambition is to lead the way to zero emissions in the trucking business by accelerating the development of battery and fuel cell vehicles. And we will reset profitability. We will target the benchmark in each region. Every region must deliver competitive performance and we are willing to implement the measures necessary to achieve this goal. We are willing to take hard decisions to lower our breakeven and raise our performance,” said Martin Daum, CEO of Daimler Truck AG.

Financial ambitions

Daimler Truck CFO Jochen Goetz committed to improving profitability, raising returns and delivering strong shareholder value as an independent company. Daimler Truck will target benchmark profitability in all regions, and aim for an overall double digit return of sales by 2025, in a scenario with strong end market conditions.

Daimler Truck announced that it will reduce fixed costs, capex and R&D spending by 15% by 2025 (vs. 2019 actuals) and intensify its focus on the most profitable segments and regions. Further emphasis will be put on the growth of its aftermarket and services revenues to drive profitability and customer retention. New and fast growing services in the fields of digitalized, autonomous and electrified transport offer additional growth potential and Daimler Truck sees significant growth potential in services and aims to increase the revenues on the service portfolio from the current 30% towards 50% in 2030.

Regional benchmarks

In a recently announced move, Daimler Truck changed the organisational structure to give each region more entrepreneurship and greater product development responsibility. Each of the major market regions of North America, Europe, Latin America and Asia will be tasked with targeting its local profit benchmark. 

“We need to reset profitability. We have set clear targets to streamline our fixed cost base and unlock growth in services. And we will also use our targeted regional approach to foster entrepreneurship and financial performance in our business units.” said Jochen Goetz, CFO of Daimler Truck AG.

Zero emissions

Andreas Gorbach, the new CTO and head of the Truck Technology Group, set out the premises of the Daimler Truck technology strategy: First, the company will ramp down internal combustion engine (ICE) powertrain spending and work with partners. In addition the company is actively seeking additional partnerships in the heavy-duty engine sector to share necessary investments. Daimler Truck will further reduce spending in conventional powertrain and redirect the majority of R&D spending to ZEV technologies by 2025. For ZEV technology, the company is committed to both battery-electric vehicles (BEV) and hydrogen solutions.

BEV Trucks

To accelerate the company‘s BEV ramp up, Daimler Truck is significantly ramping up in-house eDrive technology know-how and development. In addition Daimler Truck today made some key partnership announcements in the fields of battery technology and charging infrastructure.

Further products such as a 500km-range eActros LongHaul will be launched in the coming years. With a dedicated next generation BEV truck planned for the coming years, Daimler Truck is aiming for a range capability of up to 800 km.

Key partnership announcements

Daimler Truck AG and lithium-ion battery manufacturer and developer Contemporary Amperex Technology Co. Limited (CATL), a global leader in its field, announced the intensification of their existing partnership based on their shared vision of CO2-neutral electrified trucking. CATL will be the supplier of lithium-ion battery packs for the Mercedes-Benz eActros LongHaul battery-electric truck. The supply will extend beyond 2030. 

To support customers in the early stages of operation eTrucks Daimler Truck is also kick-starting charging infrastructure in the core markets of Europe and North America. In Europe Mercedes-Benz Trucks announced a strategic partnership with Siemens Smart Infrastructure and Engie to provide charging solutions for truck fleets at depots. In North America DTNA‘s powertrain unit Detroit announced a partnership with Power Electronics to provide onsite consulting, installation and support for 350 kW megachargers. 

Hydrogen fuel cell truck development

In addition to its intense focus on battery electric trucks, Daimler Truck also intends to accelerate the development and deployment of Hydrogen Fuel Cell Trucks (FCEV). The high energy density of hydrogen, quick refuelling times and the likely development of a hydrogen energy system in many markets mean that Daimler Truck is convinced that FCEVs will play a key role in commercial transportation. Backed by the cellcentric JV with Volvo AB and with a clear technology roadmap, Daimler Truck is committed to bringing these vehicles to the market.