How is the market evolving for heavy duty commercial EV vehicles?

We can see that the market in the 2W and 3W segments is clearly on the rise with a large part of the 1 million EVs sold accounted by these segments. The number of players, the government incentives till now, low cost of operations and public experience seems to be finding a threshold. Keeping in mind the size of the market that India is, one would expect all aspects of the eco-system - charging stations, local supply chain, policies - to fall in place to drive these segments towards the envisaged 2030 ambitions stated by Niti Aayog.

One would also expect a rise in the city bus market, where STUs backed by government ambitions towards Net Zero, will drive the adoption of E-buses. There are likely 3,000 odd e-buses already operating, which while being good is still a small share of the total bus market. However, the national plans of tenders worth 50,000 buses in the coming years will surely help the city bus segment increase its share of electric vehicles.

However, when it comes to the other key segments we are engaged in, primarily heavy-duty applications in the trucks and construction equipment industry - electromobility is still in the early stage in the country. In our view, when it comes to heavy duty and longhaul applications, there is no silver bullet. A mix of three technologies will help decarbonise our industry - Battery Electric Vehicles, Hydrogen Fuel Cells Electric as well as ICE on renewable fuels. This is very much India's approach too.

However, even as we take that leap, in our HD truck long-haul segment, we could also opt for solutions such as LNG. Liquified Biogas (LBG) can be even better as it has potential to remove 100 per cent CO2. We have a Volvo LNG tractor-trailer currently doing pilot run in India. While we consider all future options, recently the first Volvo Electric Compact Excavator EC55 was introduced in India, along with SDLG Electric 5.5tonne Wheel loader.

What kind of demand are you witnessing for heavy duty commercial EV vehicles?

When it comes to freight transport and long-haul transport, the current demand for zero emission transport is still in a nascent stage. However, all large organisations with large distribution transport networks are committing to a Net Zero future. And this implies that they are all on the drawing table to see how they can make their logistics net zero too. We also see large mining, retail and core sector corporate who have clearly articulated their Net Zero ambitions and are actively discussing means to make their logistics (which includes transport) zero emissions.

It's a matter of time that we see greater traction in the heavier duty segment too, though the answer would lie across a range of options - Alternative fuels on ICE engines, Battery Electric or Hydrogen/Hydrogen Fuel Cells.

As mentioned earlier, the demand for city buses is already triggered through the national initiatives through STUs. Here, the performance of the e-buses on road currently - in terms of operating economy, battery life and resale, range etc - will help set the pace for the future, especially the large bus tenders planned in the coming years.

Do you think 40 per cent of bus sales would be electric by the end of this decade.

When it comes to city buses, the ambitions in having 40 per cent of the buses sold as electric by 2030 is achievable. However, here our view is that the bus segment must approach the transformation to electromobility within the overall framework of sustainable mobility. Cities are critical engines of growth and will determine the quality of life of almost half of India's population in the coming decade. So, the aim should be not merely inducting Electric buses, but to making sure that public transport is the number 1 choice for citizens. Else we will be merely congesting cities with electric buses, instead of diesel and that does not imply ‘sustainable mobility.' Today, the ratio of number of buses to people in India is far lower than typical countries.

Hence, even with electric as the base, the key focus must be to increase bus capacities in our cities and make the bus and the bus based public transport system attractive enough to motivate citizens to leave behind their personal vehicles and move to public transport instead.

When it comes to trucks, the draft report from Niti Aayog indicates an ambition towards 9 out of 10 trucks in India by 2050. This is possible if we get the eco-system in place. At Volvo Group, globally, we already have the trucks in place where we are now commercially offering up to 44-ton battery electric trucks for city onto regional transportation.

However, when it comes to long-haul transport and heavy demanding application one would expect to see Hydrogen Fuel Cell trucks.

The Volvo Group has committed to the most ambitious commitment level provided by SBTi, the Business Ambition for 1.5 °C. In addition, Volvo Group is targeting to be net-zero in 2040 to reach a rolling fleet net-zero value chain emissions by 2050. So, our aim is that we will have only zero emission vehicles sold in 2040. Already by 2030, we aim to bring down our GHG emissions from our trucks and buses by 40 per cent.

What steps are you taking to accelerate Zero Emission solutions in Heavy Vehicles?

It is about implementation now. For the larger understanding that the eco-system needs to be transformed is clear. Every new option involves large investment into energy production, infrastructure, product development as well as manufacturing. The direction and roadmap in this regard is key. This is key for industry players to judge the market demand and develop a business case for the investments required. We see that most players have already stated their intentions in considering all options.

India's focus on electromobility, hydrogen mission, PLIs, current and future demand and supply interventions will all go a long way in building the grounds for successful transformation. Additionally, steps will need to be taken to promote local technology development and innovation. A key role will be played by financial institutions and financial instruments that support manufacturers and fleet operators in their shift to electric or alternative fuels.

Also, to ensure full decarbonisation requires updated energy grids and sufficient renewable energy. However, as we have seen globally, a key means to accelerate the future will lie in partnerships. At Volvo Group, our pathway to zero emission transport solutions involves a range of partnerships: across batteries, fuel cells, building both charging and hydrogen retail network as well as a supply chain with zero emissions. The future will require a new eco-system and that means partnership across - Industry, authorities, academia, research, and the entire value chain. In Europe, Volvo Group, Daimler Truck, Traton are collaborating to set up 1,700 high performance green energy charge points, on and close to highways as well as logistics hubs. This partnership in building infrastructure is also a call to industry, governments, and policy makers to work together for rapid expansion of the necessary charging networks.

Finally, a key enabler in helping the freight transport sector to shift towards electromobility lies in higher logistics' efficiencies. Clearly, low efficiency levels in logistics are a barrier to investment. Because low efficiencies do not allow optimum utilisation of the Asset (truck for instance) and hence the fleet operator mindset is to play safe and keep costs low and not to invest big. However, a shift to zero emission vehicles would probably mean higher initial costs and is in a way an investment even if operating costs of alternative vehicles are low. Higher logistics efficiencies, which implies higher vehicle utilisation and greater revenues, thus is a key for fleet operators to shift to alternative energy solutions. Here, India's ambitions under the National Logistics Policy along a focus to building world-class infrastructure and roads, will play a crucial role.