Published - September 14th, 2023 @ 3:40 PM (GMT+2)
Volvo's Dual Sustainability Strategy:
Volvo (STO:VOLV-B.ST) Trucks is taking impressive strides in both electric vehicle (EV) production and materials sourcing to achieve a sustainable supply chain. With the Ghent factory in Belgium now on board, the company has four manufacturing sites dedicated to electric truck production. Meanwhile, a strategic collaboration with H2 Green Steel aims to significantly reduce the greenhouse gas emissions associated with steel production.
Volvo's Ghent Factory: A Production Powerhouse
The Ghent facility is Volvo's largest production site, boasting an annual capacity of roughly 45,000 trucks. According to Roger Alm, President of Volvo Trucks, this addition is pivotal in enabling more transport companies to transition to electric. Three diverse electric models—the Volvo FH, FM, and FMX Electric—are being assembled in Ghent, each capable of handling up to 44 tonnes.
Integrated Production Line for Flexibility:
One of the Ghent factory's unique features is its integrated production line. Electric, diesel, and gas-powered trucks are assembled on the same platform, offering operational flexibility. The factory utilizes battery packs from the adjacent, newly opened battery assembly plant in Ghent, further streamlining the production process.
Volvo Trucks began electric truck production in Blainville, France, in 2019. Following this, production expanded to New River Valley in the U.S., and, eventually, the Tuve plant in Sweden. The company has received orders, including letters of intent, for approximately 6,000 electric trucks from 42 countries across six continents.
Policy Incentives for Electrification:
For a broader adoption of electric vehicles, Roger Alm emphasized the necessity for government incentives. He calls for stimulus programs, improved power grid capacity, and CO2 taxes to make sustainable transport methods more financially viable.
Collaboration for Near-Zero Emission Steel:
In a noteworthy partnership, Volvo Group has teamed up with H2 Green Steel to procure near-zero emission steel. This material is essential for Volvo, as steel is a primary component in truck, bus, and construction machine manufacturing. The first delivery from H2 Green Steel's plant in Boden, Northern Sweden, is expected by mid-2026.
Strategic Objectives for Green Materials:
This steel agreement is part of Volvo's more significant commitment to sustainability. By 2030, at least 10% of all steel purchased annually will be near-zero emissions, fulfilling a pledge set by the First Movers Coalition, where Volvo Group is a founding member.
Volvo's new sourcing agreement serves as a confidence boost for green steel suppliers. H2 Green Steel's CEO, Henrik Henriksson, acknowledged the importance of this partnership in accelerating the commercial vehicle industry's transition to net zero.
Conclusion:
These simultaneous developments in electric truck production and materials sourcing put Volvo Group at the forefront of the sustainable transport revolution. Investors eyeing future-centric portfolios would do well to pay close attention to Volvo Group's initiatives.
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