Volvo takes consultative approach to electric vehicle sales
The transition of a fleet to electric trucks will not really reinvent its business. Things are always going to be loaded onto a trailer and unloaded at a different location.
The shift to zero-emissions, however, will reinvent the business model of most heavy-duty truck OEMs and deepen the fleet/dealer relationship, as motor carriers, in some cases, arm themselves to adopt emerging technologies that they do not fully understand and are not equipped. for full in-house support.
Volvo Trucks North America takes a consultative approach that goes hand-in-hand with fleets, from truck acquisition to infrastructure construction, maintenance and service, and brings it all together in one package that allows hauliers to cover the whole process with one payment. .
“We’re not trying to sell battery electric trucks,” said Magnus Koeck, vice president of marketing and brand management for Volvo Trucks North America. “We try to help customers find the best solution that meets their needs; diesel or electric.”
Volvo Trucks expects a 50% reduction in CO2 emissions by 2030 and 100% CO2 reduction by 2040, but “we believe we can go faster,” said Peter Voorhoeve, president of Volvo Trucks North America .
Much of the heavy work of reducing near-term emissions will be done by Volvo’s VNR Electric. Announced in late 2018 and available in five configurations, production of the all-electric VNR began in 2021 with production of the next-generation models currently underway.
As strongly as its electric regional tractor features in its plans for the United States, Volvo’s approach to zero emissions is three-pronged and includes diesel, battery-electric and fuel-cell electric engines.
Volvo’s global electric range includes six models ranging from medium to heavy.
Electric gold standard
Transitioning a fleet to an electric battery comes with many questions: what do we do if it breaks down? How much do the parts cost? How can we even make repairs?
Sam Ellis, Volvo Trucks product manager, said the company rolled out its Volvo Gold contract to address those concerns.
The contract is a mandatory component with the acquisition of a VNR Electric. Under the agreement, the truck is fully supported with remote diagnostics, and the contract covers all repairs except tires and glass. It also locks in parts and labor costs, and the trucks can be serviced at any certified Volvo EV dealership. The company currently has 18 Volvo Trucks EV-certified dealerships, and 59 more are in development.
Scheduled maintenance includes annual major maintenance and 30,000 mile chassis lubrication service. Other filter and fluid changes occur annually or at 150,000 miles or more.
Preventative maintenance is covered and managed as needed, but each PM includes a full inspection.
The truck’s battery, electrical system and electric powertrain are also covered.
Billing options are flexible and payable as a lump sum, monthly ACH or monthly payments funded with Volvo Financial Services. The gold contract is interest free. The cost is simply spread equally over the duration.
The gold contract may alleviate some of the concerns of keeping the truck moving, but there are many other concerns that come with the acquisition: cost of equipment, charging infrastructure, collateral value, new technology, immobilization of capital, navigation in various incentives and Insurance.
Logan Andrew, head of electromobility market development for Volvo Financial Services, said the Gold contract can be bundled with insurance payments and charging infrastructure installation and maintenance, into one payment monthly which covers virtually all areas of truck operation.
Volvo helped QCD, a Texas-based fleet that serves the restaurant industry, find nearly $4 million in grants to install eight DC fast chargers and two portable chargers from Shell Recharge Solutions and acquire 14 VNR electric trucks for serve its distribution center in Fontana, California. , “with Volvo Financial lease financing matching the full cost of running diesel,” said Manuel Aguirre, head of charging and infrastructure at Volvo Energy.
To date, Andrew said there has been a “good mix” of customers leasing or buying trucks and Jared Ruiz, director of electromobility sales, said the return on investment – which he says is still difficult to calculate – was not a primary consideration for the fleet. acquisition, it was more about companies looking for greener solutions or under pressure from shipper-customers demanding that their carrier partners reduce their carbon footprint.
There are two main modes of charging: depot charging, where trucks are charged at a company’s terminal, usually at night, and public charging.
“We see that up to 80% of the power for charging battery electric vehicles will come from depot charging,” Aguirre said. “That’s where the fleets have control of the infrastructure. They control access to infrastructure.
Charging at the depot can take 2 to 12 hours, while public fast charging can charge a truck in an hour or less, or 6 to 12 hours with a 50 kilowatt slow charger.
Although there are only two choices when it comes to charging type – fast and slow – this is new technology and uncharted waters for most fleets. Volvo now offers advisory services to help fleets select, design and install charging capabilities, maintain them and finance them, including help finding applicable incentives.
“There are a lot of trade-offs,” noted Dan Freeze, product planning manager, of the inverse correlation between installation cost and charging time: the less it costs to install, the longer it will take. time to load the truck. Higher capacity loaders, for example, can cost up to $1 million but can load a truck in less than an hour, while cheaper lower capacity units can take more than half a day.
As part of its consultative approach, Alexis Clemons, Volvo Group electromobility sales manager, said Volvo can run real-life route simulations for fleets, showing how an electric truck could fit into a cycle of given service. Clemons said the models assume worst-case scenarios for reach and capacity, and added that to date, actual word performance has been better than predicted modeled performance in all cases.
Once the carrier has moved on to acquiring the trucks, Volvo can help monitor their status in real time and compile reports showing how a truck’s performance compares to others in the fleet. Volvo can then help the fleet optimize battery health, make recommendations for charging practices and manage end-of-life strategies.
“Once we get to the end of real life, or the end of the Gold contract, we’re going to have a conversation: ‘Can we refurbish these batteries and get this truck back on the road?’ Or we’re going to say they’re no longer in a good enough state of health,” and they need to be reused, Clemons said, noting that the company expects an 8-year lifespan for its batteries.