2021 will be remembered as a year of continued and extreme supply chain issues, an acceleration of the transformation of the company and relentless focus on our purpose to drive the shift towards sustainable transport.
I stepped into the role of Scania CEO in May 2021. It is a special honour for me to be back at Scania, leading the company that has had such a tremendous influence on my life and career. Scania is already a driving force for transport sustainability, creating an impact across our entire industry. Working alongside the global team at Scania, I am looking forward to continuing this journey, doing our part in making the world better for both business, society, and the environment.
“Throughout the year, we stayed focused on our purpose towards drive the shift to a sustainable transport system.”
President and CEO, Scania and traton group
A challenging year
2021 was a turbulent year, marked by achievements but also supply chain challenges. On the one hand we saw a revitalised transport market, with a surge in demand for goods transport. On the other hand, supply chain disruption – and in particular the semiconductor shortage – had a major impact on our operations and our ability to deliver to our customers.
It is a troublesome situation for us, our suppliers and of course our customers, but I am immensely proud of the way the Scania team has dealt with the challenges. Scania managed to avoid unplanned production stops longer than anyone else in the industry. Thanks to a good collaboration in the organisation and with the unions, more or less daily interactions with our suppliers and of course a close dialogue with our customers, we managed to keep getting vehicles out on the roads. However, unfortunately, we also experienced stoppages in production. Thanks to the trust our customers place in us, we have been able to work hand-in-hand with them throughout the crisis, mitigating the impact. At Scania, the close relationships we develop with customers have always been one of our strongest assets. Customers invest in a Scania because of our quality and they have stayed with us even when lead times have been significantly longer than usual, for which we are very grateful.
Despite the challenges we faced in 2021, the year saw some remarkable milestones. Throughout the year, we stayed focused on our purpose to drive the shift to a sustainable transport system.
During 2021, Scania made important progress in our electrification journey. We became the first company in our industry to publish a life cycle assessment of a battery electric truck, comparing its environmental impact with that of a truck powered by an internal combustion engine. We know that battery production is energy intense but the results showed definitively that the battery electric truck has a lower carbon footprint throughout its life cycle, even with the current energy mix.
Thanks to the rapid advance of electric vehicle technology, Scania announced projects that raised the bar for electric heavy vehicle performance. These include our partnerships with timber, pulp and paper manufacturer SCA for the development of an electric 80-tonne timber truck, with Jula Logistics for the extra-long 32-metre electric haulage truck and with chemical supplier Wibax, who are already using their 64-tonne electric truck in daily operations. Projects such as these are helping to demonstrate to the world that electric vehicles are living up to their promises in terms of range and carrying capacity, even in the toughest conditions. The electrification of long haul and extremely heavy transport is not only viable, it is coming much sooner than expected.
Partnership for infrastructure
For customers to embrace electric transport, the right charging infrastructure must be in place. At Scania, we are playing an active role in projects to scale up infrastructure, and we are committed to working in partnership with other players across the transport ecosystem to do so – including our direct competitors. In 2021, we joined forces with Daimler Truck and Volvo Group, through Scania’s owner TRATON GROUP to invest in a high-performance charging network for heavy commercial vehicles.
Whilst we are preparing for high volumes of electrified vehicles, many of our customers are not yet ready to shift to electric. It is vital that we ensure these customers also have access to the most sustainable transport options using conventional powertrain technology. This leads me to one of the biggest milestones of 2021 – the launch of Scania Super, our new powertrain platform. Ready to run on biofuels, and capable of delivering at least eight percent fuel savings compared with our previous highest performing powertrain, it is a crucial step forward in our sustainability journey. Since its launch, Scania Super has received great feedback and interest from customers and the industry press.
Transforming for tomorrow
Scania made major strides in changing our industry for the better in 2021 – but we also made some significant changes to our company. We continue to prepare for the ramp up of our industrial and commercial capabilities in China. The move is strategically important for our company, not only increasing our global production capacity, but also making us an integral player in one of the largest and fastest-developing markets in the world.
During the year we also made changes to transform our company, moving to a new operating model. Technological change is moving our industry into uncharted territory, and the customers, competitors and products we will have in five years’ time may be very different to those we have today. The changes we are making will give us the speed and flexibility we need to adapt quickly and stay competitive in the future.
As of October 2021, Traton Supervisory Board decided to merge the functions Scania CEO with the CEO of TRATON GROUP, as a long-term solution. It makes sense to have a brand-CEO as the CEO for the Group. The mandate is strong and clear and we will build on the strengths of all brands in the Group and leverage the modularisation that has enabled Scania’s profitability leadership in the industry over time.
Several times during the year, I have had the opportunity to meet with influential stakeholders from every corner of the world who share our vision for sustainable transport. It is inspiring and energizing but sometimes also frustrating, since the consensus for what needs to change increases, but it is hard to get the processes to pick up speed.
Towards net zero
At Scania, we have committed to ambitious emission reduction targets in line with the Paris Agreement. We have integrated our science-based targets in our Corporate Targets and they are the foundation for the strategic choices we make and the way we are transforming every part of our business.
We continue to push and challenge other stakeholders to follow our lead because we know that we cannot achieve this change alone. We drive change across industries and one such platform is the European initiative CEO Alliance. While industry joining forces can accomplish much, in order to succeed, governments must also step up. They need to make significant investments in the build out of infrastructure for charging electric vehicles, including the underlying electric grid. Policymakers need to put a meaningful price on carbon that reflects its actual environmental cost. They need to support companies and industries that want to move faster by removing regulatory barriers and ensuring that we have the support structures in place to enable a rapid transition to low carbon technologies. I take every opportunity to advocate for this stance on behalf of Scania and our ecosystem. Notably, I did so in the UN’s climate summit COP26 in Glasgow in November.
At the summit, I signed on behalf of Scania a global Memorandum of Understanding (MoU) endorsing the effort to reach zero-emission trucks and buses by 2050, making us the first company in our industry to do so. This commitment is very ambitious and we support the memorandum because, from a vehicle point of view, we believe there are no fundamental technological barriers to decarbonising our industry.
As frustrating as it can be that change is not happening fast enough, the joint force from governments, businesses and other organisations which came together at COP26, is truly an unstoppable movement now and that makes me feel hopeful.
I want to round off by saying thank you to everyone in our Scania family for their hard work and commitment in what has been a particularly trying time. We have shown amazing resilience as an organisation, and we have demonstrated we have the vision and adaptability we need to take on the future. As a result we have emerged from a difficult year in an even stronger position to drive the shift and change our industry – and the world – for the better.
We do not expect 2022 to be easy. The situation in Ukraine has sent shockwaves around the globe, and although its full impact is difficult to assess at this point, political instability on top of the ongoing supply chain issues, bodes for another tough year. But looking back at what we achieved in 2021 and how we have adapted to disruption before, I feel confident that we are ready for the challenge.
President and CEO, Scania and TRATON GROUP