Volvo Trucks urges collaboration on green transition

The automotive industry is under increased pressure to transition from fossil fuel-powered platforms to those that produce no carbon emissions, with automakers faced with an unprecedented challenge in meeting regulatory demands. Even if they do, challenges still lie in waiting. For instance, industry trade group CLEPA warned in December 2021 that allowing only zero emissions vehicles to be sold after 2035—as specified in an EU proposal—would result in the net loss of 275,000 industry jobs. Finding the right path forward will be crucial for the industry’s continued success.

Leaving a perfect system

In trucking and logistics, companies face an even more challenging future. Niklas Gustafsson, Chief Sustainability Officer and Head of Sustainability and Corporate Affairs at Volvo Group, is not timid about the scale of the task ahead for Volvo Trucks. “Trucks are a working tool, and they need to be up and running,” he says. “Our customers are leaving a perfect system where everything works and you can find diesel fuel everywhere.” While that is less than ideal from a climate perspective, the current system is convenient for the commercial vehicle (CV) segment. Under a new, green regime, “the uptime of the trucks will need to be as good or even better than what it is today,” he says.

Additionally, few truckmakers will accept a transition that involves less transport. For Gustafsson, reducing transport itself is not the answer to reducing emissions. “GDP growth in the world is always closely connected to growing transport needs and people moving to cities,” he says. “All these trends are moving in one direction. We will need more transport tomorrow than we need today.”

The First Movers Coalition

In a bid to tackle this transition, Volvo Trucks has signed up to the First Movers Coalition, a group aiming to stimulate early market demand on new low-carbon technologies. Launched in November 2021 by John Kerry, US Special Presidential Envoy for Climate, the group includes representatives from four key sectors: aviation, shipping, steel and trucking. Several truckmakers are members, including Volvo, Scania and Mahindra and, as founding members, each made at least one purchasing commitment on emerging technology when the group was founded at COP26.

Volvo Trucks is aiming for at least 30% of its heavy-duty and 100% of its medium-duty truck purchases be zero-emission vehicles by 2030, but the benefit of the coalition goes beyond these individual commitments, says Gustafsson. For instance, a transition to fossil-free steel is also of particular interest to Volvo Trucks. In October 2021, Volvo launched a mining load carrier that it said was the world’s first vehicle made from fossil fuel-free steel,  Achieving progress on nascent green steel technology ultimately “comes down to partnership and finding others out there that want to do the same thing,” he says. “We see great opportunities in teaming up with the whole steel industry that wants to transform to fossil-free steel.” Enabling such wholesale disruption could require further cooperation, even with competitors.

Joint ventures

Partnerships like the First Movers Coalition are badly needed, argues Gustafsson. For example, he is also concerned about the time being taken within the energy sector to secure permits and investments for electric charging. “It is not only worrying me, it is worrying the whole truck industry,” he says. Volvo Trucks has therefore committed to a joint venture with Traton and Daimler Truck, aiming to build a network of 1,700 charging points across Europe within five years. “We haven’t really seen the energy sector taking good steps in that direction.” According to the European Automobile Manufacturers Association (ACEA), Europe requires up to 15,000 high-power public and destination charging points for heavy-duty vehicles by 2025, and up to 50,000 by 2030. The new joint venture will therefore only meet basic needs for long-distance travel. Whether future collaborations will go further remains to be seen.

This collaborative spirit is unlikely to last forever. This particular moment of transition from one platform to another calls for partnerships, but it is unclear how long it will last. Nonetheless, the First Movers Coalition is a clear sign that even large truckmakers like Volvo Trucks believe the scale of the green transition requires a new kind of thinking, and a new approach to competition in the short term. “We have no intention to be the only first movers in here,” Gustafsson says. “We would like many more, including our competitors, to join in. We do not want any kind of exclusivity here at all. The more the merrier.”