Daimler and Ford to pursue fuel cell venture
By Bernard Simon in Toronto
Thursday Nov 8 2007 14:20
Daimler and Ford Motor (NYSE:F) have set up a joint venture to pursue development of emission-free fuel cells for cars and trucks as an alternative to petrol engines.
The two carmakers have given the partnership momentum by buying Vancouver-based Ballard Power Systems (NASDAQ:BLDP) ' troubled automotive fuel cell business, including numerous patents and 150 employees.
Vehicles powered by hydrogen fuel cells emit only water vapour through their exhausts. Fuel cells are also far more energy-efficient than internal-combustion engines.
Buyt Casey Selecman, an analyst at CSM Worldwide, an automotive consultancy, cautioned that "there hasn't been a breakthrough technology yet to create the [required] economies of scale".
Daimler and Ford were previously shareholders in Ballard, which pioneered fuel cell development in the 1990s, but has struggled to come up with a commercially viable system for mass production.
It has so far produced only about 130 cars, trucks and buses.
John Sheridan, chief executive, said the sale "lowers Ballard's risk profile by addressing the realities of the high cost and long timeline for automotive fuel cell commercialisation".
A Ford spokesman said that "we can move much more quickly this way".
Daimler will own 50.1 per cent of the venture and Ford 30 per cent. Ballard will hold the remaining shares covered by a purchase or sale option agreement with Ford. Each of the three partners will contribute $60m to the venture.
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