Response to interpellation 2023/24:266 on the automotive industry's production of electric trucks
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
KD argues that the automotive industry is central to Sweden's economic development and the green transition 1 2. KD proposes reinforced climate premiums for heavy vehicles and a market introduction support for light electric trucks 1. KD emphasizes that the government has strengthened the market introduction support to lower costs 2. KD believes that the state must provide basic infrastructure and energy for heavy vehicles 3. S argues that the government is sending mixed signals by simultaneously investing in electrification and making oil consumption more market-economically viable 4. S proposes a special taxation of fossil-fueled trucks 5. S argues that accelerated electrification is important to reduce expenses 6.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Energi- och näringsministern Ebba Busch (KD)
Mr. Speaker! Isak From has asked me what measures I intend to take so that the large investments being made in the Swedish automotive industry will be successful, promote a climate transition, and create new jobs instead of risking an increase in the number of layoffs. It is a very concrete question.
The automotive industry is central for Sweden to remain a leading country in the transition. The Swedish automotive industry has the potential to become a leader in the green transition, and through high climate ambitions, the Swedish manufacturers have the opportunity to also drive other manufacturers in the transition. The automotive industry's large establishments and extensive investments are a decisive factor here.
The climate and business policy that the government is driving is ambitious, effective, and results-oriented. Swedish business shall be given the conditions to be a leader in the green transition. Many different measures affect whether the industry's investments become successful. This includes, among other things, expanded electricity production, skills supply, and fast, predictable, and efficient permit processes. Furthermore, the government is making several large investments in the transition of the transport sector.
The Government has tasked Sweden's export and investment council, Business Sweden, with strengthening the coordination of efforts for large-scale establishments in the automotive industry's green transition. The assignment aims to realize the vehicle manufacturers' key investments in the form of establishments, primarily within battery production.
The market introduction of environmentally friendly heavy vehicles has progressed during recent years, and the number of electric heavy vehicles is increasing, although not at the same pace as in the passenger car segment. Swedish manufacturers are leading in this development. At the same time, electric heavy vehicles constitute a small proportion of new sales and the total vehicle fleet.
To promote the market introduction of these new technologies, the government has proposed enhanced climate premiums specifically for heavy vehicles and work machinery by increasing the appropriation by 992 million kronor in 2024. The appropriation is expected to increase by 1.5 billion kronor in 2025 and by 2 billion by 2026. In addition, the government is introducing a temporary market introduction support for light electric trucks amounting to approximately half a billion kronor in 2024 and expected to amount to just over half a billion kronor in 2025 and 660 million kronor in 2026.
The government has also taken several measures to accelerate the expansion of charging infrastructure. Firstly, the government has allocated funds to support such a development. Most recently, in the budget bill for 2024, the government proposed an increase in the appropriation for charging infrastructure, within expenditure area 21 Energy, to 450 million kronor for 2025, and the appropriation is estimated to amount to 620 million kronor for 2026. These are many figures, but together with previous investments, the available funds for this appropriation now amount to 2.5 billion kronor for 2024-2026.
At the same time, the government proposed additional funds for Klimatklivet which can also be used for support for charging infrastructure. Furthermore, an increase in the administrative grant for the Swedish Energy Agency has been proposed with 8 million SEK from 2024 for the national coordination of the expansion of charging infrastructure.
The Government has also tasked a special investigator to analyze and propose certain measures to accelerate the electrification of the transport sector. The investigator shall, among other things, analyze whether there are reasons and conditions to change the Traffic Ordinance, so that municipalities can make exceptions for electrified transport in certain places and under certain circumstances.
Furthermore, work is ongoing on the government's climate policy action plan, where the transport sector's transition will be an important part. The plan will be submitted to the Riksdag before the end of the year in accordance with the Climate Act.
To strengthen Swedish competitiveness and create conditions for more jobs in more growing companies, the government is making various efforts for framework conditions and well-functioning markets that strengthen companies' competitiveness, strengthened conditions for innovation and renewal, and strengthened entrepreneurship for a dynamic and diversified business sector.
Isak From (S)
Mr. Speaker! Where are we headed?
Thank you, Minister, for a long and detailed answer! I must say that the Minister looks lively and alert despite last night, which was surely pleasant.
I have submitted this interpellation in two rounds, so to speak. I submitted an interpellation that I then felt I needed to withdraw and supplement. Worrying signals emerged. Among other things, Volvo Trucks has said that they are scaling back their production. This is being signaled, not least in Umeå. But this turned out to be more of a form of market adjustment because the global economic situation overall is on a downward trend.
The starting point is, however, not least that which has been highlighted by Scania. Within the transport industry, there is considerable concern regarding the government's dual steering signals. Just as the Minister stated, the government has an action plan and is investing concrete funds, which we have no comments on.
One could see it as the Minister here having signaled a broad paved road for electrification. But at the same time, one has dug a deep ditch and created various obstacles by making oil consumption more market-economically viable.
This sends mixed signals to the market about which path to take: Where are we headed? Should we believe that this is what society wants?
Both transport companies and vehicle manufacturers have shown that an electrified truck can be just as competitive. It is, however, more expensive in price right now, but over time it can be viable from a market economic perspective and, not least, from a climate and climate-economic perspective.
Where are we headed? This is something one can reflect upon now that we have seen the oil countries' enthusiasm during COP 28 to continue conducting oil extraction on a previously unseen scale. What, then, is it that we are going to power our vehicles with?
The vehicle manufacturers in Sweden are also asking this question. The large investments that have been made to manufacture electrified trucks are now threatened by the market seeing that fossil diesel will continue to be what politics prioritizes. I would say that the market is ahead here. It is necessary for politics to put its foot down and speak about where we are actually heading.
Energi- och näringsministern Ebba Busch (KD)
Mr. Speaker! At the risk of sounding like a well-known C member, I answer: Forward! We are moving forward.
We have previously had problems answering where we are, but we can answer both the question of where we are and the question of where we are headed. This can also serve as a pedagogical example of the difference between "where" and "where to" and when these should be used.
We are moving forward. We are moving towards a fossil-free place. But we will do it in a way that is competitive. We will do it in a way that does not kill Swedish companies or destroy Swedish household budgets.
Thus we come to the question of the reduction obligation. There, the government and the four coalition parties have now announced that we shall go down to the minimum level regarding the requirement for the inclusion of biofuels, just as we promised during the election campaign. Why then? Well, because biofuels became incredibly expensive. One can also question how sustainable it was to so to speak vacuum up the entire world for slaughter remains, slaughter waste, and other things to convert them into biofuel that would go into Swedish tanks. That made grandmother and grandfather suddenly need to start counting coins and twenty-kronor notes to see if they could afford a car holiday or to go and visit the grandchildren. That was the situation we were in and partially still remain in, even if it is better now.
This is the reason why we have lowered the tax and paused the indexing, and we are now also lowering the reduction obligation at the turn of the year. It is possible to make the green transition without destroying either Swedish competitiveness or household finances.
Then the question is: What signal does this send to the market and to the entire transport sector, which is to transition? We are very clear about what the long-term is.
Let me quote Scania's CEO Christian Levin. He says in an interview with Sveriges Radio: "We see a very large interest from the customers and it is very fun, but we see too few completions. There is uncertainty regarding electricity costs, regarding the political support systems to support the transformation and then regarding charging infrastructure." Furthermore, he says: "Here we need bold political decisions that make fossil fuels more expensive, that switching to electric vehicles becomes cheaper and that we get power grids and charging infrastructure in place."
I presented an incredible amount of figures earlier to show what we are trying to do to pave the way for the rollout of this, especially the charging infrastructure. But one of the major problems here is not what it costs to refuel, but that it is still much more expensive to produce these trucks. Electric trucks still cost two to three times more than regular diesel-powered trucks. So it is not just the operation that is the big challenge, but it is about getting down the cost of the production itself.
We will do what we can to ensure that Sweden is an attractive country with good soil for companies to make these heavy investments. We know that fossil-free, reliable power production is an important part of this, as well as that the charging infrastructure must be in place if large transports are to be able to run on these trucks through all of Sweden. From the government's side, we are taking big steps in and with this budget in the short term. And in the long term, it is no secret that it will be very expensive to drive around with fossil fuels. But now we are enabling a transition for more during a transition period.
Isak From (S)
Mr. Speaker! When it comes to the reduction obligation and household finances, I partially agree with what the Minister says.
We have revised parts of our policy and seen that it went too far and was too costly. However, the question is: Who does one benefit? It is clear that through direct grants or in the steering through taxes, one can benefit those who truly need the car in the countryside.
One can also, when it comes to fossil-fueled trucks, imagine a specific different taxation aimed at the vehicle tax or the areas where they are driven. This would also favor a transition to electrification.
Then I share the transport industry's own assessment that approximately 30 percent of all heavy transports over the foreseeable period will need to run on some form of liquid fuel, preferably biofuels, because it will not be fully possible to expand electrification throughout the entire country. It will not be economically justified to do so everywhere either, and therefore one probably needs to think a bit of both here and there.
The Minister mentioned something that I agree with and think is good, namely the investigation that has been commissioned and which is to analyze certain measures to accelerate electrification. However, it is not to submit its bill until December 31, 2024, and then the question is: How long will it take for the government to submit a bill to the Swedish Riksdag that would enable these efforts to be made?
We have a significant gap here and now. If the automotive industry and the truck buyers are to go and wait for this, it will mean that they either continue to buy entirely diesel-powered trucks or decide that it probably won't amount to anything and that they do not dare to test.
Some need to go first and show that it is possible. Now, smaller tests have shown that it will work. It will work. A truck drives almost as far. It does, however, require that a sustainable charging infrastructure is designed. I agree with the Minister that this is needed, especially for long-distance transports.
When it comes to city driving - perhaps goods vehicles in this city or in the metropolitan areas - there is nothing today that says that one cannot charge your truck during the night in the depot and then drive during the day and load and unload your goods in the city. This could be done. It can be justified. It would also kick-start the transition in a completely different way, and it would also be a driving force to actually dare to invest.
Energi- och näringsministern Ebba Busch (KD)
Mr. Speaker! We begin at this end: The automotive industry is very important for Sweden. It has great significance. Sweden is one of the countries in the world where the automotive industry has the greatest significance for the economy. It is one of the country's most important industries and strongly affects the economic development in the country as a whole.
This is somewhat interesting. In an international comparison, Sweden is quite unique from this perspective. That is why we lean so heavily into this. I understand that some may think it sounds slow, but one must be aware that the reorganization of energy policy that we are now doing and the offensive energy policy we are now pursuing accelerates the electrification of the vehicle fleet.
This means that we can continue to realize the plans for our heavy industry and our transport sector, which each individually account for approximately one-third of Sweden's emissions, thus together two-thirds of Sweden's total emissions. If we are to be able to transition them, a sensible and realistic energy policy is crucial.
It is also this that enables the individual consumer to make the decision to switch from the fossil-fueled passenger car or truck to electric, because one knows that there is a predictability in the energy policy also when it comes to roughly where the price level will land. We have some work to do to reach this position. I mean that we now have a credible plan to expand the electricity system so that we reach the goal of an electrified vehicle fleet.
The EU is very clearly governing in this regard. Sweden has also, Mr. Speaker, during the Swedish EU Presidency, pushed forward for Fit for 55, which is the single largest legislative package in the EU's history. This climate package will also continue to price out emissions going forward and thus make the fossil-free more profitable.
What Isak From points out is correct. It is something new that is to be rolled out, and that is why we have strengthened what is called market introduction support - precisely to lower the costs for introduction. We need to lower the threshold for the new technology to achieve a transition of the transport sector. And this is what I mean that the government is doing.
So far, it is only on one occasion that I have been accused of being slow. We need to have good grounds in order to be able to make sharp decisions, even if it means legislative changes. This is not something we can do lightly, but I share the desire to produce conclusions from investigations as soon as possible so that that which is intended for the Riksdag can also reach the Riksdag.
Isak From (S)
Mr. Speaker! The Minister refers to the climate policy action plan which is to be submitted to the Riksdag, according to the law. We and other parties look forward to it and to seeing what it entails.
We also included the entertainment and interest part of government investigator John Hassler's investigation, which points out what the Minister says, that the EU policy and EU governance will mean that fossil fuels will be phased out and become more expensive. Someone will at least have to pay for the emissions. The question here is whether it will be the taxpayers or the consumers or who is going to do it.
To reduce expenditure, regardless of whether it falls on the state or the consumers, accelerated electrification is very important. That the government has had to stand here and say that the automotive industry is important and that these issues are very important is fundamentally good, because we have a shared responsibility to clarify that electrification must occur.
We would like to see more people dare to take the step and actually order an electric truck, and in that regard, what the government says is important. Thus, my starting point is: Where are we headed? If we are to continue to wait for several years, there is a risk that both the market and the automotive industry will abandon the idea of transitioning and think: Transitioning is probably for someone else and not for us.
Then the demand for the continued oil production of Opecländerna will win, and I do not believe that either I or the Minister wants to be a part of this. We safeguard Sweden and Sweden's interests more than that.
Energi- och näringsministern Ebba Busch (KD)
Mr. Speaker! I thank you for over an hour and a half in the chamber with very interesting interpellations, all of which in some way land on the question of electricity – where it should come from and where it should go.
I want to start by confirming back to Isak From that we share the view that Sverige AB must come before much else. It is this that we, as elected representatives, are tasked to safeguard. It is, as said, many Swedes, both globally and specifically in Sweden, who are employed thanks to our automotive industry.
The Swedish automotive industry is also in many ways a hope that we can manage the green transition, that there are companies that are prepared to take on the extra social responsibility but also drive it towards a situation where it can become very price-competitive. In that case, we need to provide support from the state side.
When it comes to the question of who should pay, we will probably, as in many major transitions, need to be several who help each other.
But the question is: Does the state provide the basic infrastructure, the basic soil, that is needed for it to be a good environment for these former companies to make their heavy investments?
Where I mean that we have shown that energy policy is a crucial part of this. An increased market introduction support is another part. A third part concerns the charging infrastructure and rolling it out specifically also for our heavier vehicles and not just for the passenger car segment. And if we are in a position where all good forces cooperate, then I believe we can see a quite substantial transition in the coming ten years of specifically the transport sector where Sweden and the Swedish automotive industry can be an important role model.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.