Can you speak about Volvo’s commitment to be completely EVs by 2030, and the strategy to achieve this goal?
Volvo is evolving in the midst of changing societal and mobility needs. Because of this context, we are going through a massive transformation of our technology base, where every entry in our portfolio will appear as an electric variant. As demand is being driven by the consumer for their benefits such as comfort, noise performance, and environmental consciousness, we will continue to expand our pure electric hypermodern products, leading to a portfolio that will be completely composed of EVs by 2030. This is one of the most ambitious electrification strategies within our industry. We want to set the pace in the transition to zero emission vehicles.
Is Volvo able to meet the current rising demands in view of the world-wide supply chain bottlenecks?
Demand is currently higher than what we can supply, and our sales are thus supply limited. The growing demand for EVs is to some extent limited to certain geographies, which also points to the biggest challenge in this transformation - easy access to charging; where demands are typically lower, there are problems for consumers to charge. Supply issues are still persisting, but I do not foresee that these issues would necessarily limit the electrification transformation.
Can you elaborate on Volvo’s target to be climate neutral by 2040?
The first part of our carbon neutral journey is to go fully electric by 2030, but that alone is not enough. We would also need to address emissions across our value chain. This includes our production footprint as for a pure electric vehicle this is up to 70% higher than a comparable petrol or diesel propelled vehicle due to all the materials and energy that goes into the production of the battery. We thus have the challenge of using clean energy in the production of vehicles and also accessing fossil-free steel and aluminum manufactured with clean energy. In a holistic approach, we also need to think about the electricity that goes into the vehicle during the usage phase and would need to work with society and energy supply companies to be able to provide our consumers with clean energy to charge their vehicles.
To become climate neutral by 2040, we would need a significant degree of circularity in the industry - recycling and maximizing the reuse of virgin materials to degrees we have never seen before.
In what ways can you try to reduce CO2 emissions coming from the supply chain?
We consider the CO2 footprint through the entire value chain. The majority of CO2 emissions are created in earlier steps of production before materials get to our facilities, and we need to take a holistic approach all the way from the original source of the virgin materials, through the supply chain, through the logistics, through our own manufacturing system, and also through the usage phase. This is extremely difficult because as one single car company, we cannot control the energy supply of the entire world, but we can definitely be part of the solution and help our consumers to be provided with clean electricity as they charge their vehicles. We are starting to implement different digital methods and are working with different partners on actually tracking the resources all the way back to mining. We are also working on solutions where for instance a battery will have a passport to define its origin.
With Volvo’s EV market being mainly in Europe, do you see an appetite for EVs growing in other geographies?
The appetite for pure EV is currently still the strongest in Europe, especially in the Northern parts of the continent. In the US it varies depending on location – the West coast and East Coast appetite is growing fast, but in other areas it is growing slower, partly due to access to charging stations. In China, appetite for Volvo EVs are also highly diverse as competition is fierce with other EV manufacturers in the market. I think that a clear governmental support towards EVs will also increase demand. In this regard, we welcomed the EU and California’s recent decisions to end new fossil fuel vehicle sales by 2035.
What is the future of hydrogen in the automotive industry?
Hydrogen is definitely an area of interest, but it is difficult to say if it will come to passenger cars, or only commercial vehicles.
What are Volvo's main challenges as you try to transit to a greener economy?
Other than supply chain issues, ensuring that we source responsibly and greater access to clean energy, the development of global charging networks and infrastructure is a significant challenge. Increasing demand and the market economy is driving an increased need for skilled workforces at a rate that outpaces the supply of people being educated. For Volvo, access to key competence and a skilled workforce is one of the most important things to secure. The challenge of achieving circularity and autonomous driving are the two things that will fundamentally change mobility and how mobility fits into society in a long-term perspective
