Volkswagen Truck & Bus GmbH, a wholly-owned subsidiary of Volkswagen AG, said that it is focusing on three trend-setting fields, namely automated driving, connectivity and alternative drive systems that are friendly to the environment.

The Volkswagen Truck & Bus division will invest EUR1.4 billion (USD1.65 billion) in new technology including electric drivetrains, autonomous systems and cloud-based software, Andreas Renschler, head of the unit, said.

Volkswagen Truck & Bus GmbH is a wholly-owned subsidiary of Volkswagen AG and is a global leader in commercial vehicles with its brands MAN, Scania, Volkswagen Caminhões e Ônibus and RIO. In 2016, the brands of Volkswagen Truck & Bus sold a total of 184,000 vehicles. Its product range includes light commercial vehicles, trucks and buses that are manufactured at 25 sites in 17 countries.

Faced with enormous growth in transport volumes around the world and emission regulations that are becoming more and more stringent, customers are increasingly looking for such solutions. More efficient and cleaner transportation not only reduces the impact on the environment, it also makes logistics companies more profitable.

Working in cooperation with DB Schenker, MAN will start testing the first platoons on the digital test track on the A9 highway between Munich and Nuremberg in spring 2018. Scania is involved in a platooning project in Singapore, where the plan is to have platoons run on public roads between two port terminals.

“Platooning is the first step towards automated driving on public roads,” Andreas Renschler explained. “The next step will involve enabling truck convoys comprising different brands to operate in platoon formation. As part of this process, Scania and MAN will join forces under the Volkswagen Truck & Bus umbrella to pioneer technology and develop standards that will shape the future of the entire industry.”

Volkswagen Truck & Bus said it is working closely together with Volkswagen Group Research to make automated driving a viable option on public roads, all the way up to autonomous driving at level five. The “Fellow Truck” project, for instance, gradually integrates artificial intelligence modules into the vehicles.

Fully autonomous Scania vehicles are ready to be used in mines, while the first commercial vehicle will be shipped to its owner within the next few weeks.

Volkswagen Truck & Bus is also working on electric solutions for use in both medium- and heavy-duty distribution transport and city buses. It will soon have a complete range of electric vehicles for the European market. The jointly developed e-drivetrain will form the basis of any electric architecture in the future. This electric powertrain is designed in a way that means that it can be used to drive future distribution trucks and city buses manufactured by the Volkswagen Truck & Bus brands as a universal modular element. Navistar, Volkswagen’s strategic partner in the U.S., will also use the platform to be able to offer electric distribution trucks from 2019 onwards. MAN is already well on its way to developing an electric distribution truck.

“We plan to deliver the first nine fully electric trucks to our customers in Austria by the end of 2017 – including large supermarket chains, breweries and haulers. Electric drives and distribution are a match made in heaven: The drives are quiet, do not produce any emissions locally, and are a perfect fit for customers’ requirements. Equally, demand for these types of vehicles has been on the rise. We will be launching the first small set of vehicles on the market at the end of 2018,” Joachim Drees, CEO of MAN Truck & Bus, said.

As far as heavy-duty trucks are concerned and when it comes to long-haul transportation, modern-day battery technology still has a serious hurdle to overcome: Meeting the necessary energy requirements would disproportionately reduce load capacity. However, alternatives do exist. These include combustion engines powered by gas or biodiesel. Running engines on Liquefied Natural Gas (LNG) is a solution that holds great future potential for long-haul transportation, the company said.