At the recent IAA Transportation 2024 exhibition in Hanover, Europe’s largest trade show for commercial transport, the development of low-emission and zero-emission transportation was a dominant theme.
Volvo Trucks, as one of Europe’s big players in the truck manufacturing sector, are naturally at the heart of this transformation, which is proving to be anything but predictable. Even within Europe itself, hauliers are upgrading their fleets in different ways according to variances in infrastructure, subsidies and other key factors.
This has ultimately led to manufacturers like Volvo Trucks continuing to pursue development across different powertrains in order to meet the complex needs of the European market.
So to find out more about the intricacies of the market for new trucks in Europe in 2024, we spoke to Jan Hjelmgren, SVP of Product Management & Quality at Volvo Trucks.
During our discussion, Hjelmgren provided insights into Volvo Trucks’ approach to product development, emerging business models for electric trucks, and the innovations that could accelerate the transition to electric trucking in the coming years.
Why Volvo Trucks is continuing to offer a wide variety of vehicles with different powertrains
First and foremost, we began our discussion with Hjelmgren by asking about the variety of the product range of Volvo Trucks and other big manufacturers.
Although electric vehicles have attracted crowds at IAA Transportation 2024, a close look at many manufacturers’ new product lineups suggests that a wide variety of vehicles with different powertrains is the way to go.
When asked about this, Hjelmgren told Trans.INFO that Volvo Trucks’ wide product portfolio is a response to the varied market conditions across different regions, as well as a reflection of the need for different technological solutions to facilitate decarbonisation.
“Being global and being in 130 some markets in very different conditions when it comes to electricity availability, and different fuel availability, we need to have a broad offer for our customers. That’s the case today and it’ll most likely be the case a long time into the future as well,” said Hjelmgren.
The SVP of Product Management & Quality at Volvo Trucks then added:
“When we speak about decarbonising, we’ve also been very clear that it’s impossible to do it with one solution. It’s not just battery electric, fuel-cell electric or combustion engines, it’s all of them. So that’s why we have such a broad offer and that’s why we’ll continue to do this.”
Subsidies having a big influence on customer preferences
According to Hjelmgren, customer preferences in Europe are largely shaped by local conditions including infrastructure, energy prices, and government subsidies.
“As for the different customer preferences we’re seeing, in Europe we can see that there’s different levels of infrastructure, different situations in terms of energy prices and fuel prices, and these influence the type of vehicle carriers are interested in. Even more important, I would say, are the different subsidies in different regions and countries – these influence buying behaviour a lot,” Hjelmgren told Trans.INFO.
Hjelmgren added that in some countries, such as Germany, the lack of subsidies makes zero-emission vehicles a less attractive option, while in Sweden, government support makes the switch to battery electric trucks more feasible.
“We’re mapping different countries, and sometimes regions as well, to understand what might make sense in that market. Unfortunately, I think it will continue to be very different in Europe and beyond, with the differences becoming even more acute when you widen your scope.” stressed Hjelmgren, highlighting the disparate nature of the European truck market.
Volvo Trucks open to exploring new business models
The different economics behind electric trucking has also given rise to numerous business models, including trucking as a service and charging as a service.
Looking ahead, Hjelmgren revealed that Volvo Trucks is not shying away from any business model that could facilitate the transition to zero-emission vehicles.
“We’re not excluding any business models,” Hjelmgren said, noting that the company is open to leasing, rental, or any other model that might ease the burden for customers transitioning to new technologies.
“We will not be the one saying no to a new business model, rather the opposite. We want to be leaders in this transformation,” stated Hjelmgren.
The future of internal combustion engines
Despite investing significant time and resources to develop its electric and hydrogen technologies, Volvo Trucks is certainly not abandoning development of its internal combustion engines.
During our discussion, Hjelmgren emphasised that decarbonising through combustion engines, particularly by using renewable fuels like biodiesel or HVO, remains an important strategy.
“As I’ve said before, we are convinced that decarbonisation via combustion engines is important. However, if you speak about what’s the most intelligent way to do things to reduce your environmental footprint today, it’s to start using biodiesel or HVO. If you can find that at a decent cost, you can make a very big impact for the future. Hopefully a transport buyer may even be willing to pay a small premium for that kind of transportation,” Volvo Trucks’ SVP of Product Management & Quality told Trans.INFO.
Furthermore, Hjelmgren highlighted the potential of hydrogen combustion as a viable, carbon-neutral technology for the future:
“We also see hydrogen combustion as a very good way of becoming carbon neutral in the future – particularly when there’s green hydrogen used in combustion engines. It’s not a massively different setup than the trucks we have today. It’s more or less a matter for us to develop it, and that is what we are doing, but also for the infrastructure and the supply of green hydrogen to emerge.”
The hydrogen combustion roadmap
Asked about when we might begin to see hydrogen combustion engines become a noticeable part of the zero-emission road transport eco-system, Hjelmgren stated that although hydrogen trucking is still in its developmental stages, Volvo Trucks is already preparing for its rollout.
“In 2026, we’ll start with customer pilots whereby we work with real customers doing real transport with hydrogen,” Hjelmgren revealed.
Full-scale production is expected later in the decade, though the timeline will depend heavily on infrastructure development, Hjelmgren explained. This is because hydrogen trucking, much like electric trucking, faces significant hurdles due to the lack of widespread refuelling infrastructure.
“It will be dependent on how many customers feel that they have the possibility to fulfil their operation, and that will be based on infrastructure. So it will be at the later part of this decade, but exactly which year remains to be seen,” said the Volvo Trucks representative.
Regulatory environment and the need for harmonisation
Next, we quizzed Hjelmgren on the role of regulations in shaping the trucking industry, particularly in Europe.
He stressed that regulations like EURO 6 and the upcoming EURO 7, primarily aimed at reducing nitrogen oxide emissions, don’t actually influence customer purchasing decisions directly.
“The regulatory environment impacts what we have to sell a lot, but it doesn’t impact what our customers need to buy,” Hjelmgren pointed out.
However, one area that Hjelmgren believes requires more attention is the harmonisation of regulations across Europe:
“It can take a lot of time to implement European Union legislation across all Member States. That means that Denmark may not do things at the same time as Sweden and France and so on and so forth. Of course we’d like to see more harmonisation on those kinds of incentives, whether that be CO2 based or something else to make the equation a little bit different from the customer’s point of view. Then it can actually make sense for the customer to buy the right clean solution. SO we just want to see a little bit more of harmonisation, starting with Europe.”
Why battery tech development is key to accelerating electric transformation
The development of battery technology remains a crucial factor in the future of electric trucking, with Hjelmgren telling Trans.INFO if there is any one area that has the potential to accelerate the electric transition, it is battery tech.
“If there were to be one such area [that could really accelerate electrification], I’d say the development of battery technology. It will become cheaper, it will be more energy dense, and be lighter. But I don’t don’t believe that will happen next year. Something will nonetheless happen that means that instead of 1 customer buying, 10 customers will buy.”
Meanwhile, the development of charging infrastructure is another key factor. This is emphasised by the fact that Volvo Trucks is actively investing in this area. As part of a joint venture with Daimler Truck and Traton Group, the Volvo Group and its partners aim to install and operate at least 1,700 public charging points near highways and at logistics hubs and unloading zones.
On the other hand, Hjelmgren acknowledges that this is just a small fraction of what’s needed to support the widespread adoption of electric trucks.
“Even though I think it’s amazing we’ll build 1,700 charging points, that’s still a very small portion of what’s necessary. We won’t build European charging infrastructure completely, but we’ll be a big part of it, and it will be worth it; we’ll make sure our customers use it. Much more needs to happen as well though – there must be other investors, much bigger sums have to be invested than is the case at the moment,” concluded the SVP of Product Management & Quality at Volvo Trucks.