(Reuters) -Accelera, a zero-emissions business unit of Cummins (NYSE:CMI), Daimler (OTC:MBGAF) Trucks & Buses US Holding and PACCAR (NASDAQ:PCAR) said on Wednesday they formed a joint venture to advance battery cell production in the United States.
Demand for lithium-iron-phosphate (LFP) battery technology remains strong from companies such as Tesla (NASDAQ:TSLA), Toyota Motor (NYSE:TM), Ford Motor (NYSE:F) and Hyundai Motor (OTC:HYMTF), looking to cut back expenses and push out more affordable electric vehicles (EV).
Daimler Truck, Accelera and PACCAR will each own 30% of the joint venture, which will initially focus on LFP battery technology family for commercial battery-electric trucks.
The companies, which expect to see growing demand for their battery technology through the decade, added they expect to invest between $2 billion and $3 billion to set up a 21-gigawatt hour (GWh) factory to manufacture LFP battery cells.
"This planned joint venture enables economies of scale beyond Daimler Truck," said Martin Daum, CEO of Daimler Truck.
LFP battery-cell maker EVE Energy will also serve as the technology partner in the joint venture with a 10% ownership.
The transaction is subject to customary closing conditions and regulatory approvals.
LFP battery cells were developed in the United States, but Chinese companies such as BYD (SZ:002594) and CATL currently dominate global production.
Additionally, more companies have been trying to set up manufacturing facilities in the United States and take advantage of the federal subsidies offered.