How Volvo’s CSO drives its electric truck strategy

Karin Svensson spent more than two decades in roles with electric truck leader Volvo Group’s group strategy, research and development, and public affairs organizations before becoming chief sustainability officer in 2022.

That experience is essential for getting ideas in front of other Volvo Group leaders and cultivating a culture that positions the Swedish company’s transition to 100 percent fossil fuel-free vehicles by 2040 as a “significant opportunity” to earn more revenue from each truck, bus or piece of heavy-duty equipment it sells.

“Understanding how we do business, what is of interest and value for our customers is really, really important for my role,” said Svensson, during the latest edition of Climate Pioneers, our interview series. 

Working within an organization that views sustainability as something that’s layered on top of other goals can be “demotivating,” she said. “We really want to make sure that it’s integrated in every part of our business.”

Leading supplier to early adopters

Volvo is the market leader in long-haul electric trucks, accounting for half of sales in Europe and North America. It has sold more than 3,500 vehicles to high-profile customers such as Amazon and PepsiCo in 45 countries since 2019. Those vehicles have traveled almost 50 million miles — saving an estimated 68,000 metric tons in carbon dioxide emissions compared with the diesel-fueled alternatives.

During the first nine months of 2024, Volvo delivered 2,774 fully electric trucks from the Volvo, Renault and Mack brands, up 24 percent for the year, the company reported in its third-quarter financials. Electric truck deliveries were off 4 percent year-over-year in the third quarter, a slowdown also reflected across the company’s business.

Svensson’s proximity to Volvo’s executive leadership in Sweden is important for staying the course. “We have very good top management commitment on our sustainability targets, including … our ambition to be net zero by 2040,” she said. “Is that easy? No. Do we have to discuss quite a lot how to time and face different things and investments? Yes, but our ambition to 2040 stands firm.”

Get closer to customers such as Amazon

One reason is that the transition to electric vehicles engenders the need for much closer customer relationships, and Volvo believes the services it can sell with its electric trucks, buses and heavy equipment can boost per-customer revenue by as much as 50 percent over the lifetime of that relationship, according to the company’s 2022 annual report.

“Trust” is a key factor in closing deals, said Svensson. That’s because potential customers will need to share a lot of data about their short-term and long-term goals in order to configure these vehicles properly.

“We need to help them with route planning,” she explained. “We need to help them with charging … We have to take more time to get to know each other. We might have to show use cases from other customers.”

These sorts of discussions help identify the mileage that needs to be covered in a typical daily route, a critical data point for battery configurations and charging expectations. They shaped Volvo Group’s high-profile deal with Amazon, which is using Volvo Class 8 VNR trucks for drayage operations — transporting containers to distribution centers — in the Southern California ports of Los Angeles and Long Beach. 

Related webinar

Electrifying Commercial Vehicles: How To Effectively Deploy EV Charging Microgrids

With new charging requirements for Large Commercial Vehicles in place, fleet owners must address electrical infrastructure requirements that meet the objectives for cost-effective, sustainable, resilient, and scalable EV charging solutions.

November 13, 2024

Register

The current generation of Volvo electric trucks can travel up to 275 miles on a charge, suitable for the short, predictable routes associated with drayage duties. A next-generation model due in the second half of 2025 will add another 100 miles to that range, making it more likely to be used for an entire day and charged overnight. “That will make it much easier for our customers,” she said.

Amazon was one of Volvo’s first electric truck customers in Europe. The data collected during initial operations there informed the California investments, Svensson said. “We were helped by the ambition of both companies [and] also by the policymakers putting in place for us good prerequisites for us to operate there,” she said, pointing to California’s strict emissions regulations to phase out diesel trucks by 2040.

Source: Amazon

Where competitors can be allies

Another big part of Svensson’s job is identifying and negotiating partnerships that expand the availability of technologies and components needed to spur production and commercialization of electric trucks. One example is its collaboration with Swedish steelmaker SSAB, which centers on expanding availability of near zero emissions steel. Approximately 4 percent of a truck’s emissions come from its components, and roughly 70 percent of the weight comes from steel, Svensson said. The frames of Volvo’s electric trucks are now made from that material. “I think that shows both the importance of actually working together with our partners but also being willing to take some risks,” she said.

That mindset extends to partnerships with competitors. Volvo has joint ventures with Daimler Truck to develop fuel cells and next-generation software needed to manage electric trucks. The two created another venture with another rival, Traton Group, that aims to build at least 1,700 charging points along highways and distribution hubs across Europe. 

These ventures required government approval, and Svensson’s policy experience was helpful. “The [European Union] has given approval to some of these types of relationships and collaborations where it’s for the greater good, and there are many areas where we can collaborate without jeopardizing in any way that we are tough competitors out in the market,” she said.

Moving ahead with both customers and competitors requires Volvo to be far more transparent about its future plans than in the past, Svensson said.  

“We meet lots of policymakers, we meet lots of customers, suppliers, et cetera, to really get the dialogue going so that we can overcome some of these hurdles together,” she said.