Meet the executive electrifying Volvo trucks down under

More than 100 of Volvo’s electric FH trucks are on their way to Australia as the Swedish company thrusts big haul EVs into the mainstream, signing up customers including Amazon and Holcim.

Paul Illmer may have solved one of the biggest problems with electrical vehicles – what to do when the battery’s charging capacity plummets to the point of being useless.

For logistics companies – who are Mr Illmer’s customers as vice president of emerging technology at Volvo Group – battery life is a particular source of anxiety.

Not only do you need enough charge to deliver goods from A to B, you need to know the significant premium of electric-powered vehicles over conventional diesel engines pays off.

And here is where the calculus can get tricky. Mr Illmer expects a EV truck battery to last about seven to nine years before it degrades by 20 per cent of its initial capacity – Volvo’s trigger for when its mobility is finished.

This compares with logistics companies keeping diesel trucks for about seven or eight years on average before they offload them. But beyond that, diesel trucks can still be useful, hauling cargo for a lower tier provider.

Whereas, the expensive electric version is finished – or is it?

Mr Illmer says a truck battery can still be useful – even at 80 per cent of its initial capacity – under Volvo’s stationary energy program.

“So we pull the batteries out, we containerise them. We put them in a forklift type container. And then we can use them as stationary energy for about another 10 years,” Mr Illmer said.

“We get good life out of that second life because that’s not as demanding from a charge and recharge perspective as mobility. So we get about, call it, probably 17 years of productive life from the batteries before they need to be recycled.”

Think of it like a second hand Tesla Powerwall.

Volvo's FH electric truck travelling from Brisbane to Canberra. They have a range of about 300km and can haul 44 tonnes.

As for the truck, it can have a new life too. “Companies like Volvo will have reman (ufacturing) programs where perhaps it is not the complete battery – it may be a cell module or a module that contains many cells. So you will be able to use a completely new battery or refurbished battery,” Mr Illmer said.

“But we’re probably still a couple of years away from being able to answer that in an accurate way.”

Volvo only started selling its electric trucks four years ago – meaning the ones out on the roads are about halfway through their lives. The company has so far sold about 5000 electric trucks and attracted some big customers, with Amazon founder Jeff Bezos – known for his frugality at the eCommerce giant – a fan.

In October last year, Amazon ordered 20 of Volvo’s FH electric heavy-duty trucks for use in Germany and had one parallel parked outside its headquarters in downtown Seattle at its Delivering the Future event last month.

“Amazon is committed to decarbonising its fleet, and the middle mile has been a notoriously hard-to-abate sector,” said Andreas Marschner, Amazon vice president for transportation services in Europe.

“That’s why welcoming these electric heavy goods vehicles from Volvo into our fleet is such a critical milestone. We’re operating one of the fastest-growing commercial transportation electrification programs, and we’ll continue to invest and innovate to decarbonise and deliver packages to customers with zero emissions.”

In May, Volvo signed a letter of intent to sell 1,000 electric trucks to Holcim, one of the world’s biggest construction services companies, by 2030. It said by replacing 1,000 existing Volvo FH diesel trucks with Volvo FH electric trucks, using green electricity on a typical route could slash up to 50,000 tons of CO2 emissions every year.

In Australia, Volvo currently has more than 100 FH electric trucks on their way to the country with customers snapping them up for use on short freight routes – such as Melbourne to Geelong and Sydney to Newcastle, given their driving range of about 300km.

But Volvo has shown the trucks – which can haul 44 tonnes – are capable of travelling longer distances, with Mr Illmer overseeing a trip from Brisbane to Canberra earlier this month – almost 1200 kilometres.

A Volvo FH electric truck on route to Canberra from Brisbane.

“You may have heard this acronym before, but Volvo uses ABC – always be charging. If it’s stationary being unloaded or loaded somewhere, it should be plugged in to get that maximum utilisation from the vehicle,” Mr Illmer said, adding Volvo also has developed an electric range stimulator.

“We have an AI tool where we can plug in the truck, and it gives us a base load of energy consumption per kilometres. Then we can plug in the actual additional or diminishing nature of the payload throughout the journey … and it uses real time traffic flows and topography mapping to give you a really accurate indication if the truck’s going to make it from A to B.”

Volvo Group – not to be confused with Volvo Cars that was sold to Ford for $US6.45bn ($9.84bn) in 1999 before being offloaded to China’s Geely for $US1.8bn a decade ago – makes trucks, buses and other heavy vehicles.

This month, Volvo Group reported a net profit of 14.09bn Swedish kronor ($2.06bn) for the third quarter compared with SEK8.63bn a year earlier, beating earnings estimates. But while truck deliveries rose 4 per cent, orders fell 27 per cent, reflecting a gradual normalisation of demand.

Volvo doesn’t provide a recommended retail price for its electric FH range, saying pricing is determined on a range of factors, including the number of vehicles a customer orders. But EVs command a significant premium over diesel engines.

Mr Illmer said the payback period can be faster than conventional vehicles, given electric versions can access cheaper renewable energy and don’t need as much servicing. Crucially, he said they were quieter, giving residents on key freight routes some relief.

“If you look at the total cost of ownership, and you look at the difference between buying electrons and buying diesel, it doesn’t take that long to wash up the capital increase,” he said, highlighting Team Global Express’s ‘depot of the future’ in western Sydney.

The Australian Renewable Energy Agency contributed $20.1m to the project, launched last December, with TGE and its owner Allegro tipping in $24.2m, bringing the total cost to $44.3m.

“TGE bought 36 of our trucks, 24 Daimler Fuso eCanters (Light Rigid Vehicles) – the whole project was a depot of the future with solar, energy storage and I suspect the payback period on that project isn’t going to be very long because it’s green energy, so it’s a no-brainer,” Mr Illmer said.