Niklas Gustafsson has been Chief Sustainability Officer at AB Volvo since January 2015. He has served as Executive Vice President of Corporate Sustainability and Public Affairs at AB Volvo since April 2013 and as Executive Vice President of Public and Environmental Affairs and Member of Executive Board at AB Volvo. He has long experience in the automotive industry, including responsibility for environmental and social issues within the Volvo Car Group and is heading several environment-related automotive projects.
At AB Volvo Group, our mission is to drive prosperity through transport solutions. Connected with this mission, lies many real commitments towards our customers, suppliers, employees, society, and various other stakeholders. Today, we are signatories to the United Nations (UN) Global Compact, partner in the WWF Climate Savers programme, and supporter of the UN 2030 Agenda for Sustainable Development.
Under the WWF Climate saver programme commitment, we have already committed to reduce total lifetime CO2 emission from our products [2015-2020] by a cumulative savings of at least 40 million tonne. We are also part of the Vision Zero programme along with other stakeholders. Most importantly, we remain committed to our customers’ prosperity and satisfaction, aiming to offer them continuously improved transport economy over the years to come.
The good news is that all the new technologies that are emerging are vital to help us achieve these objectives as well as our long term vision. Also, in most cases, Volvo Group has already taken a leading position in the industry.
Consider Automation. We recently demonstrated the platooning trucks in Europe as well as a fully automated truck, Vera, [which is also electric and connected]. We recently signed an agreement with a customer in Norway to provide the first commercial autonomous solution transporting limestone between hubs. In Brazil, Volvo Trucks developed a self-driving truck that significantly improved productivity for sugar cane farmers, saving four percent of the crop. Automation, in general, has significant impact on fuel savings, reduction in emissions and overall safety.
Coming to Connectivity, we already have 800,000 connected vehicles with devices to schedule services and prevent unplanned stops. Connectivity opens up many new opportunities. Consider one of our truck brand’s suite of services. It integrates intelligent software, predictive analysis and driver-assist technologies to help improve productivity and profitability. This cuts diagnostic time by more than 70 percent and repair times by over 20 percent. Digitisation is igniting transformation across industries as is the case in our industry too. Connectivity has the potential to increase transport and resource efficiency through optimised traffic flows and high utilisation of existing fleets, as well as new business models for logistics.
When it comes to electro-mobility, our Volvo buses, as far back as 2010, took the decision to offer low-floor city buses only as hybrids in the European market. Volvo Buses now offers the entire range of electrified city buses with over 4,000 Volvo branded buses worldwide. However, electro mobility is impacting all other products too. The recently demonstrated fully autonomous Vera is all-electric. Volvo CE, and its customer in Sweden, are turning the quarrying industry upside down in a ground-breaking study to create the world’s first ‘emission-free’ quarry.
Dubbed Electric Site, the project aims to electrify each transport stage in a quarry – from excavation to primary crushing, and transport to secondary crushing – although a negligible amount of diesel power will still be used. In 2019, Volvo Trucks will start selling medium-duty electric trucks for city distribution in Europe. Volvo Penta will offer electrified solutions in both its marine and industrial segments by 2021. The next step will be to target trucks for construction, regional and long-haul operations.
Much is being discussed around the manufacturing facilities too – collaborative working space with robotics and automation, 3D Printing, virtual reality being deployed, wearable suits that enhance worker performance and more.
As you will soon see, all the emerging areas – automation, connectivity, electro-mobility, new manufacturing processes, digitisation – help us to meet our customers and stakeholders’ objectives. Not only that, when brought together, they are sparking new solutions and new business models. Most importantly, they are allowing us to be far more ambitious than ever before. The Vision Zero for safety, the aim to achieve zero downtime, zero emissions are all far more plausible today than ever before.
We are already investing in most of the emerging technology areas and many of these technologies are part of our current and future commercial plans at different levels. In addition, equally importantly, our focus on the well-known (current) technologies continues to occupy a lot of our attention and resources.
Of course, much of the development that has taken place often involves a variety of partners at the different stages. Working with partners across companies, suppliers, academia, research organisations and others is now a vital part of any product development activity.
The Line 55 Electric Bus demonstration in Goteborg was a partnership across 14 different stakeholders. In US, California, the Volvo LIGHTS (Low Impact Green Heavy Transport Solutions) is a part of an innovative partnership between the Volvo Group, SCAQMD and industry leaders in transportation and electrical charging infrastructure. This is typical whenever we take our new transport solutions to market these days.
Suppliers are a key part of this future. The Group makes over 270 Billion SEK in purchases of goods and services and we have about 51,000 Tier-1 suppliers of which about 6,000 supply automotive product components. In order to enable and drive even closer collaboration and dialogue with our current and potential partners in the supply chain, Volvo Group’s purchasing organisation has a closer association with its suppliers – as exemplified in the Volvo Group Purchasing Summit. Technologies such as automation, electro-mobility and connectivity are part of their life too now. Bringing suppliers into closer partnerships early on in the journey is good way to speed up the ongoing development of these new technologies for our products, services and solutions.
Furthermore, the emerging technologies are bringing into the eco-system a range of new companies and start-ups, new business models and new opportunities. It is in this context that we have started an interesting new project called CampX in Goteborg. It is our global innovation arena for technology and business transformation. At CampX, we invite partners including customers, start-ups, suppliers, academia and authorities, to collaborate with Volvo Group experts to develop future transport solutions. Here functions from within Volvo Group come together with external stakeholders to turn new ideas into market solutions. We have gathered almost 400 of our technical and business experts within automation, electro mobility and connectivity in CampX. We will also invite selected stakeholders from the partner ecosystem, like customers, companies, academia, authorities, and so on, to join us to co-create and test new ideas using laboratories and workshops at the CampX facility.
Known Technologies Continue
Even as we lead and have investments into emerging technologies, well-known technologies will continue to play a role for quite some time to come too. So, it is not only about innovation and research into the emerging technologies. The R&D effort is continuing vigorously in the well-known current technologies too. Our engineers need to continue to innovate and develop the current technologies and make engines and transmission more fuel efficient, with lower emission levels, to further reduce the weight of the vehicles, make them more aerodynamic and to ensure that the vehicles are built to meet the future needs of drivers and operators.
Things will shift only progressively across various segments and applications. While in some applications, change will be intense, in many others it will be phased. Therefore, we need to balance the speed of transition with our product development investments too.
While Automation, Electro-mobility and Connectivity have huge potential to raise productivity and safety and reduce environmental impact, it will take time before we can fully utilise these opportunities. For instance, there are different levels of automation – from no automation to self-driving vehicles without the need for a driver or operator. The ideal level of automation will be determined by its added value for customers and society. It is likely that there will be drivers and operators in our vehicles in most applications for the foreseeable future, while we will see self-driving vehicles in specific applications, such as the confined and semi-confined areas like mines, quarries, ports etc.
While electrification in city buses is going to take place faster, the next steps will take some more time, even as the process has started– construction, regional and long-haul operations. For some applications this will take longer, not the least because it will need to keep pace with the time to increase battery capacity, reduce charging times and build up the charging infrastructure operators need. In the long-term, dynamic supply of electricity from the road could be one potential option for long-haul trucks and we are currently collecting knowledge and participating in the concept studies.
At the same time, we have a strong focus on our Common Architecture and Shared Technology (CAST) programme [modular systems]. We have 12 brands in different product segments and we try to build synergies across them. The same philosophy will be followed in emerging technologies – such as a Common Architecture and Shared Technology programme for Electric vehicles.
The conventional diesel fuel, with increasingly renewable and synthetic content, would remain a dominant fuel for many years to come, across various types of commercial applications. The biggest challenge for the large scale adoption of alternate fuels is not compatibility or emissions, but lack of adequate supply and infrastructure globally. However, work in this arena is expected to happen more aggressively in the coming days.