Volvo Group made an enormous wager after the Paris settlement on local weather change to guide the world relating to electrical automobiles and sustainable growth.
And through a keynote discuss at CES 2025, Martin Lundstedt, president and CEO of Volvo Group strengthened the corporate’s dedication to be a pacesetter to have internet zero worth chain greenhouse fuel emissions by 2040. Know-how and collaboration are Volvo Group’s handiest instruments in attaining its bold goal. That’s an fascinating factor to listen to from an organization that’s 96 years outdated.
Lars Stenqvist, joined Lundstedt on stage to convey us on top of things on how this wager is paying off. Amid local weather skepticism and misinformation, a number of the world’s leaders don’t consider within the trigger. However Stenqvist believes there’s extra threat in resisting change. That’s why the corporate is making not solely adjustments in the way it makes automobiles and the type of automobiles it makes, it’s additionally altering its entire provide chain and dealing on infrastructure like EV charging and energy era.
With freight volumes anticipated to see a fivefold enhance by 2050, the transition to ZEV options has grow to be a transparent necessity.
“If you’re not brave enough in embracing change, if you don’t invest in what is to come, then it’s a very big risk in a technology shift like this one. You’ll lag behind,” he mentioned in an interview with GamesBeat at CES, the large tech commerce present in Las Vegas final week.
We talked about this systemic shift that Stenqvist and Volvo wish to see relating to sustainable transportation. And we talked concerning the significance of digital twins, a game-like know-how for simulating factories within the digital world earlier than constructing them in actual life, to reaching these targets.
Right here’s an edited transcript of our interview.
VentureBeat: I obtained to see the keynote on-line. The largest a part of the message centered on sustainability. How deliberate was that, in comparison with simply speaking about automobiles?
Lars Stenqvist: At the moment it’s not sufficient to simply speak about merchandise. At the moment we’re speaking concerning the shift to sustainable transport. As we alluded to within the keynote, it’s not a change from product A to product B. It’s a system shift. If we don’t work from the system perspective, then it doesn’t matter if we now have the very best electrical vehicles or gasoline cell vehicles, as a result of if the system isn’t prepared, in the event you don’t have infrastructure, it won’t take off.
For us it’s not so unusual to speak about sustainability. Our enterprise concept, our technique, is to rework our firm into an organization that’s delivering actually sustainable options. For some firms, sustainability is one thing they’re doing Friday afternoon, in addition to the traditional enterprise. For us it’s the enterprise.
VentureBeat: Are you able to add some context on how lengthy you’ve been occupied with that? How did you come to resolve that that’s a very powerful factor?
Stenqvist: We’ve been on a journey for a few years relating to this. We had an excellent strategic dialogue round 2017, 2018, on how we must always relate, for instance, to the Paris settlement. We sat down and did numerous thorough strategic investigation and dialogue and evaluation. We concluded that our interpretation have to be that the Volvo rolling fleet by 2050 needs to be fossil-free. By easy arithmetic–our automobiles, on the typical, are on the street for 10 years. Meaning we can’t go on delivering fossil-driven options till 2049. We’ve got to remain 10 years forward, which means 2040. We have to be 100% fossil-free.
That was an essential assertion to make internally. This have to be our imaginative and prescient. This have to be the path of the corporate. Then we began to calculate backward. What does this imply, each from emissions views, the auto tailpipe, however what does it imply upstream as nicely, in our provide chain, relating to decarbonization within the manufacturing footprint of the automobiles? That’s additionally included. I alluded to that within the keynote.
VentureBeat: Do you suppose you’re on schedule? There’s the management imaginative and prescient from years again, however there’s additionally the tempo at which governments are altering, and shopper tastes as nicely.
Stenqvist: We predict the transformation goes slower than we had anticipated. Martin was clear on stage in the present day. A lot of choices, a lot of actions, ought to have occurred yesterday, and so they didn’t. We have to make these choices in the present day or tomorrow. We have to speed up. We wish to have the ability to look our youngsters within the eye, and in my case hopefully grandchildren, and say that within the 2020s we did what we would have liked to do. I don’t wish to should say, in 10 or 15 or 20 years, we knew what we would have liked to do, however we didn’t do it.
VentureBeat: The robust factor is, everybody additionally seems on the state of revenues and enterprise. They have an inclination to favor what has occurred up to now. That slows the tempo of change.
Stenqvist: When you’re not courageous sufficient in embracing change, in the event you don’t put money into what’s to come back, then it’s a really large threat in a know-how shift like this one. You’ll lag behind. You gained’t be related sooner or later. Within the quick time period, it’s a chance that you’ll maximize revenue. However you’re taking part in with hearth. The query is, will you keep related? Sure or no?
VentureBeat: I believed it was fascinating that Oshkosh is displaying up for the primary time of their historical past with know-how merchandise. A whole lot of them are electrical postal automobiles. They’ve EV rubbish vehicles. It makes me marvel why somebody didn’t do that a very long time in the past.
Stenqvist: Partly it’s the know-how. We’ve had ground-breaking shifts. We’ve reached new ranges in batteries, for instance. That’s one motive why it’s taking off proper now. Battery growth is fascinating relating to power density and worth per kilowatt-hour. At the moment it’s potential to do far more than even 5 or 10 years in the past.
VentureBeat: Was there a chunk of know-how you are feeling was most essential within the velocity of growth and what it might change?
Stenqvist: We’re broad in our strategy. We consider we want extra applied sciences, a number of applied sciences in parallel. There are gamers within the business that wager on one or one other know-how going ahead. We’ve mentioned clearly that for various areas on this planet, we see totally different wants. We’ll proceed to develop combustion engines, however operating on fossil-free, renewable fuels. We’ll have battery electrical automobiles, and we’ll have gasoline cell electrical automobiles, primarily powered by hydrogen. Hydrogen may also be utilized in combustion engines for direct combustion.
In addition to that, we even have a full dialogue round software-defined automobiles, digitalization, linked automobiles, information, and AI. It’s a digital and inexperienced revolution. We’ve got a broader palette of applied sciences that we wish to develop than ever earlier than. When you take a look at the monetary reporting on the Volvo Group, we’ve doubled our efforts on R&D within the final 5 years. The reason being quite simple. We consider we have to develop all these applied sciences to be related sooner or later.
VentureBeat: What’s your opinion on digital twin know-how? I’ve discovered that very fascinating. I cowl video games in addition to tech. The road between video games and simulation and actual world–
Stenqvist: It’s getting nearer and nearer. I’m an excellent fan of digital twins, of simulations. I exploit it rather a lot in my communication internally with my groups. I’m pushing my engineering groups, on no matter degree I’m speaking to them, to embrace the definition of digital twins. I need all of them to have digital twins – the part techniques, the subsystems, all of the automobiles. It goes from each single small part as much as the whole automobile. We’ll achieve a lot when we now have this extra in place. We’ve got it partly in place, however we wish to be a lot better than we’re in the present day on this space.
VentureBeat: Does it already seem to be that pays off as anticipated? The digital twin perfects the design. You construct the automobile in actual life. You’ve sensors on the actual automobile, and that feeds again information to make the digital twin higher.
Stenqvist: You can say it’s a closed loop, but it surely’s not just one loop. You may take totally different turns within the loop as nicely. For instance, we now have 1.7 million linked automobiles. Previously, from a top quality and efficiency perspective, we have been sitting and ready to see if any buyer went into the store to say a defective part, a part that didn’t work in line with the client’s expectation. Then it was dealt with within the guarantee system. Lastly, after weeks or months, it ended up on the desk of an engineer. “This customer had a complaint.” Statistically, possibly 100 clients world wide had this criticism.
At the moment, with linked automobiles, my push and my demand to my engineers is that we must always be capable of comply with the efficiency of each part on board the automobile in actual time. Each morning after they verify in on the workplace, they need to see how our parts have been performing since yesterday. You’ve designed the information that comes out of the sensors and the parts in such a manner you could comply with the well being of the digital twin after which feed it again to the design division. I’ve good examples the place they’re doing this now. Not throughout the group, however we now have good examples.
VentureBeat: About 80% of what I cowl is video games, and the fascinating instance for me this yr is Microsoft Flight Simulator. It’s a cross between video games and simulation. They are saying their sport this yr is 4,000 occasions extra detailed on the bottom than the one from 4 years in the past. They’ve plane firms designing the plane they’ve within the sport. There are cameras on these planes in all places now, and the maps are generated from these cameras. They don’t have permission to get maps from Kazakhstan, however planes flying over Kazakhstan can provide them information. They’re constructing a digital twin of the earth.
Stenqvist: Nvidia has been speaking about that very same type of earth mannequin.
VentureBeat: One fascinating final result of that’s that there are extra pilots being skilled by way of the sport for the actual world. It looks like whereas video games and simulations are separate, and needs to be, by some means they may also help one another.
Stenqvist: I believe you’re onto one thing. In precept you will have comparable beginning factors, comparable algorithms that you should use. I don’t suppose you will have too many trucking video games in comparison with flight simulators. However you’ll be able to examine gaming to what we’re doing with simulations. We’re doing rather a lot relating to crash simulations, rather a lot relating to aerodynamic flows, fluid dynamics simulations. There’s numerous crossover between that and gaming. In relation to utilizing the identical type of compute capability–gaming may be very robust relating to computational energy. That’s true for superior simulation in our case.
VentureBeat: Some folks nonetheless hope there will likely be a metaverse.
Stenqvist: We’re at all times attending the World Financial Discussion board in Davos in January. In two weeks we’ll be going to Davos. I’ve a listing in my pocket book concerning the preferred phrases, the trending matters going again a lot of years. In 2018 it was autonomous driving, for instance. That was useless for a couple of years, and now it’s coming again. Two years in the past it was metaverse. Final yr it was utterly silent on metaverse. What’s your view?
VentureBeat: Everybody felt prefer it obtained overhyped and exaggerated, and so it was only a bunch of scams.
Stenqvist: Perhaps they’re proper.
VentureBeat: Similar manner with blockchain.
Stenqvist: However blockchain will come. It is going to be crucial. We’re tremendous critical about decarbonization. If you consider the manufacturing footprint of a automobile, what we’re doing in the present day is quite rudimentary, quite elementary, our calculations. We’re utilizing numerous common figures on totally different supplies and parts and so forth.
If I’ve two suppliers supplying the identical half quantity to me, then in fact the manufacturing footprint from a carbon perspective would differ between the 2. They’ve totally different sub-suppliers, totally different processes and so forth. I want to know the precise carbon footprint of part A and examine it to the carbon footprint of the identical half quantity coming from one other provider. This will solely be executed in the event you hint all of it the way in which again to the mine. The one manner I can see to hint it again to the mine is a few type of blockchain know-how. Perhaps that might be a real use case with a purpose to get the true and actual worth.
I might like to see this within the grocery retailer. A bundle of espresso. What’s the carbon footprint of that espresso? It might be that the identical model may need a unique half-kilo of espresso with a unique worth of CO2.
VentureBeat: Do you see the worth in one thing metaverse-like? Nvidia is utilizing the Omniverse.
Stenqvist: I see numerous worth in that. On my degree it begins with bringing all of the fashions of the parts and subsystems collectively with a purpose to get a really correct mannequin of a full truck. Then the complete truck working in actual situations. Perhaps I’m not that aggressively speaking concerning the metaverse as a universe or Nvidia speaking about their world mannequin, however I’m eager on getting higher simulation fashions for full automobiles in several environments. You noticed this morning that we talked rather a lot about autonomous driving, which is an space the place you want numerous simulations. You want 200 million simulations earlier than making the primary unguided left flip.
In relation to autonomous driving–as I mentioned, there was numerous hype 5, six, seven years in the past, primarily within the passenger automobile business. Everybody promised on stage that it might be prepared in a couple of years. They’re nonetheless not prepared. The enterprise case for autonomous driving may be very a lot taking place in business automobiles. The easy motive is that we now have the enterprise case. It’s in our business the place it’ll occur, the place it’s taking place. That’s why it’s so essential to get simulation in place.
VentureBeat: And the enterprise case for simulation is right here.
Stenqvist: Sure, clearly so.
