Clear Directions

The Volvo Group has adopted some ambitious targets in its determination to fulfil its commitment to the goals of the Paris Agreement and lead the road transport industry towards net-zero greenhouse gas emissions by 2040.

Roger Alm is the global President of Volvo Trucks and Executive Vice President – Volvo Group.

Roger has been with Volvo since 1989.

Jessica Sandstrom is Volvo Trucks’ Senior Vice President of Global Product and has been involved in the organisation’s management for 15 years. Roger and Jessica spoke exclusively with Prime Mover.

Prime Mover: What will be the key enablers for electric trucks?
Roger Alm: People need to think differently when transporting goods and we need to have a different environmental perception and different environmental care. A lot of people think about the climate and how we are treating the world and we are now already doing that in a different way from previously. We now have legislations in some European cities where you cannot go in them with diesel trucks, so there will be different kinds of influences.

PM: How have different business models of the recharging infrastructure emerged in Europe and North America?
RA: There is not really one single solution and you have to take a lot of things into consideration, but the most important approach is the customer can actually charge the truck. We have signed a memorandum of understanding in Europe with some other vehicle manufacturers and we have the intention to invest in 1,700 charging stations in Europe.

PM: The road transport industry accounts for seven per cent of global CO² emissions. How is it expected to pay for reductions in emissions?
RA: We are talking about something called the ‘green premium’ and it’s slightly more expensive to operate with CO² neutral trucks. If you take the current total cost of ownership as the starting point, as time evolves and technologies improve, the costs will reduce. There are also government subsidies in Europe and the United States, and that’s important to various stakeholders and authorities. Governments support the transformations but we need to speed up and make it happen faster.

Jessica Sandstrom: As the operating range of electric trucks improves it makes the business case better and it is improving year-over-year. What we see now are people willing to pay and they are putting a value on the future and the subsidies are pushing in favour of this. Germany is a very good example of how to make the market grow much quicker by having incentives and very some clear direction from the government. Connecting incentives for trucks and the charging networks makes it easy for the customer to really understand how much the complete package will cost.

PM: In Australia trucks run faster, heavier and longer at higher temperatures across long distances. What can Australia do to encourage a faster roll out of electric vehicles?
RA: We have to take our responsibility as manufacturers and we need suppliers and other stakeholders to drive this. In Australia that will happen because more and more customers are applying pressure for things like the charging infrastructure.

PM: Volvo was heavily invested in natural gas engines. Is that going to continue or is the focus only on electric vehicles?
RA: We are committed to get to 50 per cent of our volume to be net zero emissions by 2030 and 100 per cent by 2040. We have three lines: Battery Electric Vehicles, Hydrogen Fuel Cells, and internal combustion engines which will remain but not run on diesel fuel but will use other fuels like LNG and biogas.
JS: We are looking into these three blocks of technology because we do not believe that one solution will fit everyone. We are committed to decarbonising our own entire operation which means we need to find a solution for all applications. Australia has some roadtrains that are super heavy, travelling long distances and we need to have solutions for those types of operations as well. The hydrogen trucks will fit very well when it comes to longer distances but also where there is not the ability to recharge. A complement to that is to continue to use different fuels such as LNG.

PM: Is payload an issue for electric trucks?
JS: You are almost able to get the same payload as a diesel truck, but it is also connected to regulations. In Europe we are allowed to add another tonne on the front axle to compensate for the batteries.

Jessica Sandström.

PM: There are currently some trials here with companies such as Linfox. Are electric trucks becoming mainstream elsewhere?
RA: Volvo received an order for 100 Volvo FM Electric trucks from DFDS, Northern Europe’s largest shipping and logistics company. These customers need to see a business case because they are buying so many units, not just one to test themselves to see how it is. They need to operate in a commercial situation where you need efficiency and productivity and low cost of operation. As the manufacturer we want to be early because we think this is really where we can make change for business. One thing that is important is the driver. There is a driver shortage in most parts of the world and it is quite a heavy job to drive a truck, but an electric truck is almost noise free and the driver is getting a better working environment. We want to attract new drivers.

PM: What about servicing requirements?
JS: We prefer the trucks to be on a contract where we have everything included to make sure it is not on the shoulders of the customer. This is another area where we utilise our experience from the bus business, so a lot of dealers are used to servicing the buses and they already know how to take care of the 600 volt system, the batteries and so on.

PM: Does Volvo assuming many of the risks help make the business case for electric trucks?
JS: Absolutely. The customer has a very clear picture of how much this is going to cost and there are not a lot of uncertainties. The only uncertainty is what will the price of diesel be in the future? If you calculate the business case and you compare the diesel truck with an electric who knows what the diesel price will be in three years’ time? Electricity prices are going up, as well, in certain parts of the world but still, it’s such a big difference between the costs.
RA: We also don’t know what will happen with diesel prices in the future, will there be increased taxation on diesel?

PM: Does the package include the end of life of an electric truck?
RA: We will be flexible and will have a different business model and sell the truck and the operation as a service package. We are creating a separate business unit for handling the battery situation and we will control it from the beginning to the end of the components’ life. We have different alternatives we are exploring and there will be different solutions for different markets throughout the world.

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