How are you tackling the challenges presented by the COVID-19 crisis?
The most important factor was the safety of our employees. In Europe there were two hotspots – in northern Italy and Madrid – and this is exactly where the IVECO factories are. There was clear fear, so we stopped production immediately.
On re-opening we set up new protocols to keep everyone safe. Of course, it’s not ideal to be working during the European summer with a mask, but people appreciate working in safe environments. We have had to slow the production time to make sure we can keep the safety distances, but that’s not a problem.
We also had to stay close to our customers. We reached out to them, gave payment holidays, offered support to our fleet clients and continued to keep our service network operational.
We really appreciated the work of our dealers’ mechanics, who kept the workshops open, and the drivers, who were still driving while everyone was at home. These people never get the recognition they deserve, and finally society saw how important they are.
COVID-19 has focused attention on green technology. Tell us about working with Liquefied Natural Gas.
Bio Liquefied Natural Gas (LNG) will come a lot earlier than people expect and we are seeing it grow with our customer base already. LNG is the enabler for bio LNG. You have look at it like this: LNG is the platform, bio LNG is the rocket.
If you wait for the availability of completely emission-free fuels, whether they are bio LNG or hydrogen, it will not work. If you just wait and say, ‘I want everything now: the infrastructure, the fuel at the same cost of diesel today and I also want the same the supply network’, you will be disappointed.
So we have to start with fossil fuels and I regard LNG as a friendly fossil fuel because it offers advantages, such as a reduction in CO2 emissions of about 8-10%, as well as additional benefits including a 95% reduction in NOx and significant noise reduction.
LNG is still a fossil fuel, but it enables many countries to be 10% more economical compared with diesel, and it is a viable solution. My view is that 10% is better than nothing. It is the first step.
The infrastructure of LNG has developed dramatically over the past three or four years – we now have about 300 filling stations all over Europe, although the UK is bit behind. It will skyrocket when bio LNG becomes available – I think 5-10% of the global market will go to bio LNG.
The bio LNG in Europe is very different from what is debated by a lot of environmentalists. It’s not made from palm oil from Indonesia orMalaysia, or from sugar cane in Brazil. It is made from waste – locally produced refuse and residue from farms – so I do believe LNG is a path to the future.
What about hydrogen?
We will have to move to hydrogen. To build up the hydrogen infrastructure in Europe there are technical challenges to be solved, but on the vehicle side we are very close.
Governments and the European Union have to promote this and make it easy, but economic programmes coming out of the coronavirus crisis should accelerate the moves into this new technology.
So, in my opinion we should move with LNG first, then bio LNG and then hydrogen. The major fuel from 2030 onwards will be hydrogen, but there won’t just be one technology out there – be it improved diesel, biogas as well as hydrogen.
Tell us about your hydrogen truck.
We are planning to launch our hydrogen truck in 2023, in partnership with Nikola Motor Company. We are starting with a 6×2 trailer truck because you can easily hide the batteries. If you look at the CO2 emissions from the truck sector, 50% of them come from long-haul. You must tackle this head-on or it will never go away.
We are adopting a modular strategy. It is a heavy-duty truck with its new design. All the hardware is from Iveco but the drivetrain technology comes from Nikola. We will launch the battery version at the end of 2021 and 13 months later we will bring in the hydrogen version.
What is the big issue for CV sector in the next 20 years?
Of course, we will need to see how the transport industry transforms after Brexit. I think we will continue to align on everything road transport related.
Then we have issues with driver recruitment and the shortage of professional drivers. I know in the UK it is tough, but even in the southern European countries it’s difficult to find drivers. That’s why it’s important to build trucks that are comfortable and that look good to ensure we attract more drivers for many years to come.
We’ve already touched on the need for a transformation to zero emissions technology and this is one of the biggest changes the sector faces, but one that we in Iveco are well placed to manage. This transformation needs to come as a result of investment in the technology and infrastructure as well as support by government if we are to see a clear move going forwards.
I think there is an unbelievable amount of ambition that will help us rebound after the pandemic has passed: people in our industry feel that the future is in their hands. It will take a year, maybe two to fully recover, but I don’t think this will leave too much structural damage. I am confident that we will be back, fighting fit.