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The big picture

Scania operates in a complex, changing world. Powerful, interconnected social and economic forces are shaping not only the kind of transport system we need to see in the future, but also our industry’s ability to deliver it. As Scania’s business evolves, this global context is guiding our strategy.

The forces shaping transport

The climate crisis, urbanisation and the UN’s sustainable development agenda, are three of the main forces shaping the transport sector, and defining what a sustainable transport system looks like.

 

The UN’s Agenda 2030 is rooted in the idea that social, economic and environmental development are interconnected. This means that the transport industry cannot address the global challenges it faces in isolation – for example, by focusing on decarbonisation without considering urban population growth.

 

Access to transport and mobility is vital for sustainable development. This is underlined by the UN’s sustainable development goals (SDGs), several of which are directly related to transport. These include Goal 8 on decent work and economic growth, Goal 9 on resilient infrastructure and Goal 11 on sustainable cities (which covers access to public transport).

 

On the other hand, transport has a significant environmental impact. The earth’s climate and natural systems are at a tipping point. The 2021 report of the IPCC concluded that drastic reductions in global greenhouse gas emissions during this decade are necessary to avoid catastrophic climate change. As a major emitter of CO2, the transport industry has a vital role to play in decarbonisation efforts.  

 

Transport must also respond to the challenges of urbanisation. The growth in urban populations bring increased risks related to pollution, public health and road safety. There is also the risk that access to transport services will become restricted and less inclusive, disproportionately affecting people from vulnerable groups. Resilient and well-designed transport infrastructure and solutions can help address these challenges.

96%

of urban growth will occur in the less developed regions of East Asia, South Asia and Africa.

70%

of global greenhouse gas emissions are produced by cities.

90%

of urban areas are situated at places most vulnerable to climate change.

 

Sources: Unesco, United Nations, UN-Habitat

Tools to deliver change

We are living through an era of radical and disruptive technological change. New tools and technologies have emerged that are transforming how we live and work. Some of these innovations are playing a key role in helping Scania, together with others across the transport ecosystem, accelerate the shift to sustainable transport.

 

Electric propulsion is one such technology. Electric vehicles operate cleanly and quietly, with zero particle and NOx (nitrogen oxides) emissions and a greatly reduced total carbon footprint compared with vehicles powered by internal combustion engines, especially when the electricity is provided from fossil-free energy sources. Battery technology is improving rapidly, and other solutions such as fuel cell technology are in development.

 

Meanwhile, digitalisation is driving huge  growth in vehicle connectivity, with vehicles continuously producing and sharing data. Connectivity can be a key enabler of sustainable transport by improving the efficiency of transport flows, which in turn improves fuel efficiency and lowers carbon emissions. Connectivity is also an important building block for vehicle automation. 

 

The rapid evolution of artificial intelligence and other technologies has paved the way for autonomous transport. Automation has great potential for improving transport: for example, by enabling safe transport in environments that would otherwise be dangerous for human drivers, and by improving transport efficiency and relieving congestion in urban areas.

 

This technological revolution is transforming our sector, with new competition coming into play. For the more established companies in our industry, the transformation demands a competence shift. They are required to act less like traditional vehicle manufacturers and more like tech start-ups – and they need to have the speed, flexibility and skills to match. This shift is already well underway within Scania: today, more of our engineers work in software development than hardware design.

 

Beyond our own business, the shift to sustainable transport calls for a new approach across the entire transport ecosystem. For technologies like electrification to be adopted at the scale we need to see, the right infrastructure needs to be in place. That requires partnerships and concerted action from players throughout the ecosystem, including transport companies, policy-makers, energy suppliers and infrastructure providers.

 

Shifting to sustainable transport also require substantial funding alongside financial incentives – and so green financing is also a vital enabler. For example, green bonds allow investment funds to be channelled to projects supporting sustainable transport. 

 

Meanwhile the EU’s Green Deal aims to steer investments towards zero emitting technologies. The Green Deal also includes policy proposals that aim to raise the price of carbon and make alternatives to fossil fuels more competitive.

Transformation risks and challenges

The world has become more volatile. The political landscape is polarised, with nationalist and populist forces stoking division and political tensions. While increased digital connectivity has brought unprecedented opportunities it has also amplified tensions and distrust. All of this has created a fragmented political climate that could make it more challenging to transform the transport system at the global scale we need to see. There is also the risk of leaving poorer countries behind as the transformation of transport may mature faster in developed countries.

 

Alongside this political volatility, there is also widespread economic volatility, exacerbated by the pandemic. Supply chain disruption is affecting many industries, including the automotive industry, as seen with the semiconductor shortage. Such disruption impedes production and could slow the shift to sustainable, decarbonised forms of transport – for example, by hindering the industry’s ability to ramp up production of electrified vehicles.

 

For the transport system to be sustainable it must be accessible to everyone, which is another major transformation challenge. Inequality in areas such as resource use, income, health, education and employment is widespread in society. Climate change is likely to deepen the divide, bringing increased tension and risk of social unrest and conflict.

 

Human rights abuse and corruption are other serious challenges. The risk of human rights abuses within global supply chains is a major challenge that together with corruption forms a significant threat to economic and social development, as well as to decarbonisation efforts.

Urbanisation and COVID-19

Although urban growth is expected to continue in the long term, there are indications that COVID-19 has affected patterns of urbanisation. After decades of growth, the pandemic has seen population numbers in megacities fall, particularly in developed countries. Some speculate that the new post-pandemic model of hybrid working will lead that trend to continue, driving the growth of second-tier cities and peri-urban areas. All of these trends pose questions for the transport industry, and affect what the future of transport may look like.