Volvo Cars is significantly cutting CO2 emissions in its logistics operations by switching transports between its manufacturing plants and new car depots from trucks to trains.
Especially in Europe, where trucks are still ubiquitous in transporting new cars to distribution depots and retailers in individual markets, the company is in the process of reducing emissions by replacing more and more transports by trucks with rail transport.
For example, by implementing rail transport, Volvo Cars reduced CO2 emissions by almost 75% on the route between its Ghent, Belgium-based manufacturing plant and a purpose-built depot in northern Italy. On another route, from Ghent to a second depot in Austria, emissions were cut by almost half since switching to rail transports.
Both initiatives form part of the climate action plan that Volvo Cars revealed this year. Under the plan, the company aims to reduce its lifecycle carbon footprint per car by 40 per cent between 2018 and 2025, which will require a 25% reduction in operational emissions, including logistics. The 2025 plan is one tangible step towards Volvo Cars’ ambition of becoming a climate-neutral company by 2040.
“When we said we planned to significantly reduce emissions across all our operations, we meant it,” said Javier Varela, Senior Vice President of Manufacturing and Logistics at Volvo Cars. “Our logistics network is just one piece of that puzzle, but an important one nevertheless. This is one example of our commitment to reducing our impact on the environment through meaningful, concrete steps.”
Volvo Cars is also looking to use rail transport at a wider scale in China and the United States. Already now, cars are transported from its China-based manufacturing plants to the Ghent port in Belgium by train two times a week. Other train connections deliver new Volvo cars to regional depots within China and in Russia.
In the US, the company’s Charleston, South Carolina-based manufacturing plant has tapped into a well-established rail cargo network taking new cars to depots in cities across North America. Already now, these trains replace the equivalent of dozens of trucks per week, a number likely to increase once the next-generation XC90 goes into production.
Volvo Cars’ climate action plan represents one of the most ambitious plans in the automotive industry. It contains concrete actions in line with the global Paris climate agreement of 2015, which seeks to limit global warming to 1.5 degrees Celsius above pre-industrial levels.
Volvo Cars’ 2040 ambitions go beyond addressing tailpipe emissions through all-out electrification, as it realises that electrification is not enough to reduce its impact on the environment. Therefore, it also looks at tackling carbon emissions across the board: in its manufacturing network, its wider operations, its supply chain and through recycling and reuse of materials.
The company’s electrification ambitions are reflected in the recently launched, brand-new Recharge car line. Recharge will be the overarching name for all chargeable Volvo cars with a fully electric or plug-in hybrid powertrain. The Recharge car line aims to further boost sales of Volvo Cars’ electrified cars and encourage plug-in hybrid drivers via incentives to use Pure mode as much as possible.
Volvo Car Group in 2019
For the 2019 financial year, Volvo Car Group recorded an operating profit of 14.3 BSEK (14.2 BSEK in 2018). Revenue over the period amounted to 274.1 BSEK (252.7 BSEK). For the full year 2019, global sales reached a record 705,452 (642,253) cars, an increase of 9.8 per cent versus 2018. The results underline the comprehensive transformation of Volvo Cars’ finances and operations in recent years, positioning the company for its next growth phase.
About Volvo Car Group
Volvo Cars was founded in 1927. Today, it is one of the most well-known and respected premium car brands in the world, with sales of 705,452 cars in 2019 in about 100 countries. Volvo Cars has been under the ownership of the Zhejiang Geely Holding of China since 2010.
In 2019, Volvo Cars employed on average approximately 41,500 (41,500) full-time employees. Volvo Cars’ head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars’ head office for APAC is located in Shanghai. The company’s main car production plants are located in Gothenburg (Sweden), Ghent (Belgium), South Carolina (US), Chengdu and Daqing (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China), and body components in Olofström (Sweden).
Under its new company purpose, Volvo Cars aims to provide customers with the Freedom to Move in a personal, sustainable and safe way. This purpose is reflected into a number of business ambitions: for example, by the middle of this decade, it aims for half of its global sales to be fully electric cars and to generate half of its revenue from its direct consumer business. Volvo Cars is also committed to an ongoing reduction of its carbon footprint, with the ambition to be a climate-neutral company by 2040.