Volvo Trucks North America isn’t letting the COVID-19-related drop in truck sales and corporate layoffs keep it from moving ahead with its electric truck development and its latest vocational truck models.
In a virtual press conference July 16, Magnus Koeck, vice president of strategy, marketing and brand management, called these “extraordinary times.”
“When we met at [the North American Commercial Vehicle Show] in Atlanta last year, we all knew then the market was going to come down in 2020, that is part of the business cycle. We had all planned for that. What we didn’t plan for was the COVID situation,” he said.
Normally, he noted, Volvo announces a market forecast after each quarterly report, but there’s just too much uncertainty to do that now.
Overall inventory of trucks, he noted, has come significantly from pretty much record levels, do about a three, three-and-a-half month supply. As states and businesses started reopening in May and June, he said, “retail sales and registrations have come up a little stronger than most have expected, and so have orders.”
However, he pointed to recent developments with some states pulling back on re-openings in response to a spike in coronavirus cases. Although we haven’t seen a return to total lockdown, he said, those pullbacks “will have an immediate effect on transportation.” For instance, he said, retailers may pull back on restocking inventory if it looks like in-person shopping is going to take another hit.
“I think we have and will see a positive momentum,” Koeck said. “We know the third and fourth quarters will be stronger than the second quarter, and believe next year will be stronger still. But it’s too early to tell how much.”
Volvo’s COVID-19 Response
Koeck outlined some of the responses Volvo has had to the pandemic and the resulting virtual shutdown of the nation’s economy. The company had to stop production for several weeks, and Volvo globally had to lay off 4,100 people, including Volvo Trucks North America’s “fair share of that.”
Most people in Volvo’s Greensboro, North Carolina, headquarters are still working from home – including the Uptime Center, which has seamlessly provided the same 24/7 support to customers as before, he said.
For customers, Volvo recently announced it was extending uptime service subscriptions for free until the end of the year. “Our financial company also helped out in this situation when customers have had difficulties,” he said.
Virtual Truck Walk-Arounds
For customers taking delivery of new trucks, the pilot truck walkarounds normally conducted in the Volvo Trucks Customer Center in Dublin, Virginia, have gone virtual. The virtual walk-arounds are also being used for potential customers and dealers to get a high-definition look at the design and engineering details of truck models.
In this immersive visual experience for those looking for an up-close review of a Volvo truck, customers get a first-hand look at truck details and the opportunity to provide input, even making requests or changes to their specification.
While product experts present features and advantages of the truck, live images are shared from a high-definition webcam showcasing the truck’s exterior and interior, as well as providing close-up undercarriage, powertrain, and suspension views that are very difficult to see in person – an advantage that likely will continue to be used even once in-person visits resume.
“We also found that the camera’s small size and high definition let the customer get a close look at components and installations that are not easily accessible,” said Rob Simpson, director, Volvo Trucks Customer Center. “So even with live customer visits, we will still use this technology to help them see more of our trucks.”
Electric Trucks, New Vocational Updates
The virtual walk-around are proving useful to help introduce fleets to the latest version of Volvo’s VHD vocational truck. The disruption of COVID-19 caused Volvo to cancel its participation at ConExpo, where it was scheduled to launch the VHD, so it highlighted the features of the updated model during the virtual press event. (See related story.) The VHD helps Volvo be well positioned ahead of a new highway bill likely for 2021 and housing being one of the brightest spots in current economic recovery number.
COVID-19 also affected the market for its VAH, a specialty auto hauler based on the VHD, as auto production shut down and is still not back up to full levels. Nevertheless, Volvo recently announced an overhaul of the model.
Koeck emphasized that its electric-truck program is still moving forward. Just last month, Volvo Trucks North America deployed its first pilot VNR Electric truck in Southern California as part of the Volvo LIGHTS (Low Impact Green Heavy Transport Solutions) project.
“In August, we will put the next two trucks in service,” Koeck said, noting that so far they have received “very positive feedback” from the dealers and drivers operating it.
The potential impact of COVID-19 on the market for electric trucks cuts both ways, Koeck said. “The entire COVID situation all over the world has put more pressure on the environmental and sustainability questions. From that perspective you might could say that could accelerate the need or awareness of sustainable energy sources like battery-electric trucks,” he said. On the other hand, he said, some state and local governments, with less tax revenue coming in due to COVID, may not have the money needed to provide incentives for zero-emissions vehicles.
That hasn’t stopped 15 states and the District of Columbia from signing an agreement this week pledging to develop a plan to eliminate diesel emissions by 2050. The National Zero-Emission Truck Coalition recently released its priority federal recommendations, calling for federal funding of more than $2 billion for point-of-sale incentives to jumpstart zero-emission truck production during the current economic downturn.
Koeck emphasized that total cost of ownership for the customer is an important factor at work in adoption of electric trucks. “The initial units, of course, will be significantly higher in terms of price. When volumes come up, especially on batteries… you get … better total cost of ownership calculations. If you can pair that up with incentives, that can definitely accelerate things.”
Nevertheless, Koeck said, “diesel will still be the main fuel for long haul operations” for a long time to come. Electric-truck adoption “starts with local distribution, then regional haul – that is why we’re putting the [electric] VNR out there early on – then it will come to long haul operations. But we are quite far from that.”