Volkswagen Truck and Bus Reveals its Future Transport Vision

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Jack Roberts, Heavy Duty Trucking (HDT)  /  October 11, 2017

Germany's Volkswagen Truck and Bus Group laid out its long-term plans for shaping the future of transportation this week at its Innovation Day Summit, held in Hamburg, Germany.

Andreas Renschler, member of the board of management for Volkswagen AG and chief executive officer of Volkswagen Truck and Bus GmbH, made extensive opening remarks at the conference, laying out VW’s vision for what it identifies as the three key areas crucial for the future of trucking, logistics and transporation: autonomous vehicles, connected vehicles, and clean transportation.

Renschler began by noting that Volkswagen Truck and Bus began as a startup just two years ago, with a goal of creating a climate of cooperation among VW’s various brands competing in various transportation and logistics markets, including MAN, Scania, Volkswagen Commercial Vehicles, Volkswagen Brazil, and Rio.

According to Renschler, the effort by VW to coordinate the technological development paths of these brands occurred at “just the right time to shape the future of transportation as a group.”

He added that the company’s research and development group, based in Sweden, was now coordinating and moderating each brand’s technological development efforts to coordinate and synchronize those projects across brands, companies, and countries with notable success.

“We all know that logistics and transportation is changing massively,” Renschler added. “We must consider the needs of our customers – and their customers – as well as environmental issues, technology and infrastructure and the competitive landscape if we are to shape these changes. This challenges us to rethink our business and pursue the fast development of information technology and data processing, which offer us completely new worlds of possibilities. Ten years ago, our business was very much focused on truck hardware. Today, we are focused on both hardware and software solutions. By joining forces and brand competencies in focused areas, we look to massively increase efficiencies not only for our customers, but for the entire transportation system as well as for society as a whole and our environment.”

Renschler said trucking remains a highly inefficient business today, with high shares of empty backhauls for trucks as well as “sub-optimal utilization” of assets. “Only 50% of overall vehicle capacity is actually used for transporting goods today,” he said. “But using very little data from connected vehicles will allow real-time capacity planning and bring supply and demand closer together. If other digital services are added into the equation, it could lead to capacity increases of up to 80%.”

At the same time, Renschler said, connected and automated vehicle technologies would reduce truck-related accidents and corresponding fatalities in Europe.

According to the VW executive, the automated driving “roap map” for VW will center on a “step by step” basis and said that various pilot cases from Level 1 to Level 5 automation were currently being carried out by the company. “We are gaining experience from these projects and will be ready to scale up what we’ve learned as soon as the appropriate regulations are in place,” he said.

Looking ahead, Renschler said that VW would be ready to scale up autonomous vehicles for industrial applications in the next 18 to 24 months, with additional applications such as airport snow-plow trucks ready by 2025.

Platooning will be the first step for long-haul autonomous applications, Renschler said, with mixed platoons running next year and VW autopilot systems in common use as early as 2022. “There is no question this technology will be a huge step forward in making our cities cleaner, safer and less congested,” he added.

Urban applications for autonomous vehicles are more complex, Renschler said. Yet VW expects to have its first urban bus trials running at the “beginning of the next decade,” and sees the development of urban truck platoons transporting goods in specialized corridors as a realistic solution in the short-term future.

“Much has to be done by policymakers to make these technically feasible projects become reality,” Renschler cautioned. “We will need new regulations relating to driver intervention rules and modified driver resting times as different levels of automation dictate different demands from drivers.”

At the same time, Renschler called for accelerated development of road communication systems that are harmonized to communicate more efficiently alongside the increased efforts in vehicle communication systems.

Renschler said that VW now has 300,000 fully connected trucks on the road in Europe and that the “vast majority” of trucks on the road will be connected by 2020. “To that end, we are now ready to rock the industry with our common, open, cloud-based platform developed jointly by MAN and Rio,” Renschler said.

“Our strategic partner in America, Navistar, announced last week at the North American Commercial Vehicle Show in Atlanta that connectivity, including hardware and software solutions will be the next major area of cooperation based on the Rio platform," he continued. "The first step will be the adoption of the in-cab connecting hardware device. This will serve as a major step toward creating a global platform that will connect 650,000 vehicles worldwide. That will make it the largest ecosystem for connected vehicles worldwide, once that migration is complete.”

As these systems come on line, Renschler said cloud-based solutions will create opportunities for fleets and logistics companies in terms of new revenue pools based on data-driven business models, such as dynamic routing and capacity-as-a-service solutions.

Looking at the clean transportation aspect of VW’s future, Renschler said the company was pursuing a wide range of fuel and powertrain options based on local availabilities, social demands, and customer requirements. He urged policymakers to adopt a “technology neutral” approach to future emissions regulations based on that strategy.

Renschler said electrification would likely be key for last mile and city applications in the future, and said he expects the demand for bio-fuels and other alternative fuels to increase in long-haul applications. “But,” he cautioned, “there is no silver bullet that will work for all vehicles and applications. This means a broader and more complex approach must be taken by our businesses that serve these markets.”

He noted that MAN’s EDrive powertrain system would be the “backbone” of a new Navistar medium-duty electric delivery truck in the near future. He also said he expects to see increased use of diesel-electric drivetrains in heavy-duty market segments in common use by 2025.

However, Renschler added, given the demands of heavy duty and long-haul market segments, he expects to see internal combustion diesel engines remain the dominate powertrain in these applications for a “long time to come.”

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VW to Roll Out Electric Trucks, Buses in $1.7 Billion Push

Bloomberg  /  October 11, 2017

VW Says It's Going Full-Steam Ahead on Electric Models

Volkswagen AG is flanking its push into electric cars with plans to roll out battery-powered commercial vehicles targeted at urban areas as growing public concerns about air quality boost demand.

The Volkswagen Truck & Bus division will invest 1.4 billion euros ($1.7 billion) in new technology including electric drivetrains, autonomous systems and cloud-based software, Andreas Renschler, head of the unit, said Wednesday in an interview in Hamburg. To help spread the costs, U.S. affiliate Navistar International Corp. will adopt the electric drivetrain. 

A battery-powered VW truck, dubbed e-Delivery, will roll off assembly lines in Brazil in 2020, while the German manufacturer’s MAN and Scania nameplates will both deliver wholly electric buses next year to European cities, adding to bio-diesel, hybrid systems and natural-gas line-ups.

“We believe in a wide range of alternative powertrains and fuels, depending on local availability, social and local demand and customer requirements,” Renschler said at a press event. “Therefore it is crucial that policy makers adopt a technology-neutral approach" in any regulations.

Electric trucks for local deliveries will probably exceed a 5 percent market share by 2025, according to Renschler. That compares to a forecast of about 25 percent for battery-powered autos. Commercial-vehicle manufacturers have been slow to develop electric models as loads are heavier than for cars and they serve a wider range of industry needs.

Regulatory Differences

Complicating matters is that trucks already vary significantly across the globe because of differences in regulations, making it difficult to build vehicles in large enough volumes to generate economies of scale. While in the aftermath of Volkswagen’s emissions-cheating scandal, some municipalities are looking at banning diesel engines to reduce air pollution.

German competitor Daimler AG, the world’s largest commercial-vehicle producer and Renschler’s former employer, has stepped up development of engines including fully electric and hybrid versions as well as digital services to defend its lead. Volkswagen is also facing new rivals such as Tesla Inc., which is unveiling of a battery-powered semi truck on Nov. 16.

Better battery technology will be key to making electric trucks more attractive by lowering operation costs, Renschler said. In addition to higher prices for the systems and recharging challenges, the power packs “are heavy and room-stealing,” reducing carrying capacity, Renschler said.

“With city buses, we are just hitting the break-even point compared to conventional solutions,” Renschler said. “Electric distribution trucks are expected to turn positive in 2020-25,” while battery-powered long-haul heavy vehicles will be “late” in turning a profit for their owners.

Autonomous Technology

VW Truck & Bus’s autonomous-driving technology is focused on closed environments, like snow plows at airports or transport shuttles on set routes in parking lots or factories. VW plans to be ready for commercial production of the models within two years. Engineers are already working with customers to refine technology and gain experience.

“The autonomous Scania mining truck standing outside of this building is ready to be shipped to the first customer overseas after this event,” Renschler said. “This truck is not a vision. It’s real stuff, here and now.”

Success with those models, as well as services including new software to efficiently manage cargo, will determine whether VW will gain traction in creating a global truckmaking powerhouse with an average 9 percent operating return on sales. Renschler said VW is keeping all options open to expand the business, including a possible share sale.

Renschler is also looking at increasing the 25 percent stake in China’s Sinotruk Hong Kong Ltd. that MAN holds as well as widening cooperation with GAZ PJSC in Russia and Navistar in the U.S., where Daimler’s Freightliner brand is the market leader.