Creating the Cities of the Future Jessica Sandström Senior Vice President City Mobility Volvo Buses

The Volvo Group’s vision is to become the world leader in sustainable transport solutions by creating value for customers in selected segments pioneering products and services for the transport and infra- structure industries driving quality, safety and environmental care working with energy, passion and respect for the individual The vision of the Volvo Group is: To become the world leader in sustainable transport solutions. It serves as the guiding principle in our work. 2

Global drivers impacting our society 2008 2060 1/2 2/3 living in cities Population growth and urbanization Climate change and decarbonizing transport Pressure on natural resources and raw materials Air Quality, Traffic, Congestion and Road Safety Public Transport must play its part in reducing its impact on the urban environment The world’s population is steadily increasing. By 2050 it is expected to exceed nine billion. Since 2008 more than half the world’s population lives in cities and in fifty years, that figure is expected to reach two-thirds of the population. The most intensive pace of urbanization is taking place in Africa and Asia. The overall trend is leading to an increased need for transportation and infrastructure. Cities, particularly major cities, have specific requirements for urban and traffic planning. Congestion and noise pollution also need to be addressed through the availability of vehicles specially adapted for these environments. In addition, a growing population increases the need for housing, roads and facilities. Climate change is one of the most complex and difficult questions of our time. Burning fossil fuel is the single largest source of greenhouse gas emissions produced by men. Oil has long been considered a reliable source of energy, but today, oil use is a highly contested issue. This is primarily attributable to the environmental problems associated with it, but also because future access to oil is uncertain due to dwindling oil reserves, increasing price and instability in oil producing regions. For all these reasons it is crucial to shift to sustainable energy resources. Major efforts have already been made to develop the use of renewable energy sources. However, the development of renewable fuels differs widely among regions depending on the availability of natural resources, which in turn drives the development of vehicles and machines adapted for various types of fuels. The move towards the large scale use of renewable energy is also highly dependent on political decisions and investment capacity to create the necessary production facilities and infrastructure. Another global challenge is the shortage of natural resources and raw material. Population growth, a rapidly growing middle class and greater purchasing power leads to increased consumption. Mankind is utilizing an increasing amount of land, water and other resources. More efficient use of resources is required and the recovery of a greater proportion of material is becoming increasingly important to secure access to materials. Traffic and road safety is becoming even more important as demands on transportation increases. The subject is a high priority for governments and institutions worldwide. There has also been an increase in awareness and the demand for safer products and safety guidelines at construction and operation sites. In the future, the focus on security is also likely to continue to increase because of crime, military conflicts, terrorism and natural disasters. In relation to transportation this will impact the safety of drivers, vehicles, goods and the general public. The need, however, for competent employees with these types of specialist skills will grow as products and services become increasingly sophisticated.

Global energy demand forecast* Why is energy effeciency important Avoiding dangerous climate change requires reduction in GHG emissions: the 2 °C goal Energy production and use account for two thirds of the world’s greenhouse-gas (GHG) emissions Energy demand will continue to increase rapidly from a global perspective High energy efficiency is needed to enable growth of the world economy, boosting energy security around the world and bringing modern energy to the billions who lack it today Global energy demand forecast* *IEA World Energy Outlook Special Report 2015: Energy and Climate Change

Tank to wheel Energy-efficiency How far can you go with 5 liter diesel (=50 kWh electricity, 3 kg gas) compared to a conventional diesel bus?1 CNG bus 77* Diesel bus 100 x ~4 Hybrid bus 150 Electric Hybrid bus 250 Full Electric bus 400 Index 50 100 150 200 250 300 350 400 Electricity is the most efficient way of propelling public transport Recent development in CNG engines show potential to close the gap towards diesel, if the gap is closed the energy consumption will still be 4 times compared to an electric bus **AE international: Comparison of Diesel and Natural Gas Bus Performance, 2014 (VTT report)

People chose public transport not because they have to, but because they want to

Sustainable Silent Reliable Convenient

The three cornerstones of Volvo Buses’ e-mobility Product portfolio The future will be a mix of: Hybrid Electric Hybrid Electric Complete system offering Buses, infrastructure & services Battery charged by km Competitive Life Cycle Cost vs Diesel Open interfaces One open and standardized interface for charging infrastructure Enable buses from other suppliers Driving standardisation together with Siemens & ABB

Building an attractive city requires cooperation

Traditional Volvo Bus customer Project partners Mayor City Hall PTA Operator Energy Authority Energy Provider / Electric Grid Street Authority Volvo Charging supplier Traditional Volvo Bus customer New Partners

ElectriCity – a Visionary Transport Solution

ElectriCity partners

Two bus models run on the route 7 Electric Hybrids 3 Electric buses Quiet, electrically powered 70% of the route 80% less CO2 60% lower energy consumption Flexible urban planning Quiet, electrically powered the whole route 80% lower energy consumption Zero emissions when using renewable electricity Flexible urban planning Perhaps comment on the reduction of C02 emissions: Higher here than slide 6 depending on which fuel and biodiesel the buses run on. Mention Zone Management

Visualize new possibilities

Results so far The system work every day, transporting passengers in a silent and reliable way Drivers highly appreciate there new working environment Passengers appreciate sustainable and silent bus systems

Technology can break the curve We hope that this initiative will showcase Volvo’s commitment to becoming a world leader in sustainable transport solutions. 2015 is a defining year for sustainable development globally – with both the upcoming launch of the UN Sustainable Development Goals and COP21 in December. We hope to inspire discussions and holistic thinking in terms of city planning and public transportation. Thank you for your attention – and spreading the word!