Daimler Truck aims to cut costs and boost profit across all regions by 2025 as it goes “all in” for electric and hydrogen fuel cell powered vehicles, the world’s largest truck and bus maker said on Thursday.
German carmaker Daimler plans to spin off Daimler Truck later this year as it seeks to increase its investor appeal as a focused electric, luxury car business.
“Both technologies (electric and hydrogen) will be needed,” Daimler Truck CEO Martin Daum told an investor presentation on Thursday. “And we intend to lead the way in both technologies.”
Daimler Truck said zero-emission vehicles should make up 60% of its sales by 2030 and 100% of sales by 2039.
As truck makers move towards a zero-emission world – and their hitting sustainability targets becomes more important for their customers – electric trucks are expected to be used for shorter distances, but the batteries needed for longer journeys would be too heavy and hydrogen fuel cells will need to be used instead.
Daimler Truck executives said it will cut costs and capital expenditure while focusing on maintaining double-digit margins in North America. Daum said the truck maker will relentlessly target higher profits in both Europe and Asia.
“We are absolutely committed to resetting profitability,” Daum said. “We have to deliver on this as a public company.”
“It will start first and foremost with fixing Europe,” he added. “Europe is our biggest challenge.”
By 2025 Daimler Truck is targeting margins above 10% under favourable market conditions, and between 6% to 7% under poor conditions, executives said.
Daimler Truck also plans to cut personnel costs by 300 million euros ($366 million) by 2022.
The company said it was intensifying its partnership with Contemporary Amperex Technology (CATL) (300750.SZ), choosing the Chinese battery maker as the supplier for its Mercedes-Benz eActros long-haul electric truck.
It also struck a deal with Shell (RDSa.L) under which the energy firm will from 2024 launch hydrogen-refuelling stations between green hydrogen production hubs at Rotterdam in the Netherlands and in Cologne and Hamburg in Germany.
Shell has come under pressure from shareholders to intensify its efforts to tackle climate change.
Daimler Truck and Volvo AB (VOLVb.ST) said last month they aim jointly to cut the costs of hydrogen fuel cells by a factor of five or six by 2027 as they seek to make the technology commercially viable for long-haul trucking.