Volvo Construction Equipment is staying the course on electrification despite muted market acceptance. President Melker Jernberg openly admits: "We invested too early – but that's the insurance premium we pay to be ready when the S-curve comes." In an interview with International Construction, he defends the strategy of presenting electric compact machines like the L25 and ECR 25 at bauma 2019, even though demand has lagged expectations to this day.

Early electrification as deliberate pre-investment

Jernberg recalls internal discussions in 2019: "We even debated whether to put the first E-machines in the booth or place them in a corner. I said: in the middle. If we convince ourselves that it's good, it still takes a while before you can deliver." The first customer deliveries followed in 2020. Since then, Volvo CE has developed three product generations – each significantly more powerful than its predecessor. Jernberg: "The products we're making now are much better. If that never happened, I would regret it."

He sees the strategy of early market entry as an advantage over "quick followers" who wait. Jernberg points to the entire supply industry – batteries, electric motors, inverters, chargers – which develops in parallel. "If you invest early in the S-curve, you invest too early. But since you don't know when it comes, it's simply the insurance premium." The S-curve describes a progression of slow initial growth, rapid acceleration, and subsequent stabilization – the typical life cycle of disruptive technologies.

What does the switch to electric strategy cost?

Jernberg emphasizes the economic aspect: "We are proud that we are able to remain profitable and can afford this. That is important for everyone." He rejects the interpretation that the focus has shifted from sustainability to TCO (Total Cost of Ownership). "We cannot control how the world moves or what makes the headlines. We focus on where we can make a difference: products and services that bring customers lower TCO. That is the real change – and of course that also supports the sustainability question."

For construction companies, this means: electric excavators and electric wheel loaders pay for themselves through operating costs – lower energy costs, longer maintenance intervals, no AdBlue costs, no diesel particulate filter maintenance. Acquisition costs are currently still higher than diesel counterparts, but Jernberg is betting that market penetration will drive down prices.

$1.2 billion investment in North America – focus on crawler excavators

At ConExpo in Las Vegas, Volvo CE announced a strategic investment of $1.2 billion in North America. The centerpiece: a $261 million expansion of crawler excavator production in Shippensburg, Pennsylvania. Jernberg: "We see the greatest opportunities especially in construction, mining, and quarry and aggregate sectors – and all of these sectors are strong in North America."

He acknowledges that Volvo CE has historically been strong in "loading and hauling," while excavators still have catching-up potential. "Excavator market share is of course important to us on the product side – that applies to all markets. In North America we have great opportunities. The USA is large, both geographically and in various product markets. In hauling and excavating we definitely have room for improvement. I think we now have all the pieces to compete. North America is a tough market, but important."

Three focus segments with 5–6% annual growth

Volvo CE is focusing on three core areas: construction, mining, and quarry/aggregates. Jernberg estimates that these segments will grow around 5–6% annually. His goal: "Grow a bit faster than the market." That would put Volvo CE in a strong financial position – and create room for further electrification.

End of SDLG joint venture: "Happy divorce"

On September 1, 2025, the joint venture with SDLG officially ended after 18 years. Jernberg describes the separation as a "happy divorce" and emphasizes: "We had a lot of good joint development, both in China and beyond. High volume of units sold does not always mean high profit."

Volvo CE will now focus on its own factory in Shanghai in China, which produces hydraulic excavators, electric wheel loaders, and compact machines. The company remains active in China but is withdrawing from the volume segment that SDLG served.

Rokbak closure – Motherwell remains competence hub

Jernberg confirms that Volvo CE "fought pretty hard" to find a viable business model for the Rokbak brand (formerly Terex Trucks). It did not succeed; production of articulated dump trucks was discontinued. "The future for Motherwell is hopefully great, because we have an extremely good competence base there on the hauling topic. They are a very important part of our technology teams for hauling, both rigid and articulated, and that will continue to help."

The site in Scotland thus remains as a development and engineering hub for dump trucks and articulated dump trucks – only series production is discontinued.

James Bond, S-curves, and insurance premiums

At the Welcome Dinner of Volvo Days 2026, a video was shown in which Jernberg – in a tuxedo – performed various action stunts with cars and helicopters, accompanied by a live band playing James Bond soundtracks. Most of the stunts were AI-generated, but Jernberg smilingly emphasizes in the interview that he "did some of the jumping and running myself – just not from a helicopter."

The video fits Jernberg's leadership style: approachable, self-ironic, business-ambitious, but personally relaxed. "Business is fun – but only if you win," he says. He sees early electrification as an investment in exactly this victory: "I really hope the S-curve comes quickly."

Practical implications for construction companies

For fleet operators and purchasing managers, Volvo's course means:

  • Third product generation available: Those skeptical in 2020 will find more mature electric excavators and electric wheel loaders today with longer battery life and better charging infrastructure compatibility.
  • TCO calculation decisive: Electric compact machines pay for themselves especially with high operating hours, inner-city applications, and access to cheap electricity. Those who only deploy occasionally pay the acquisition premium without amortization.
  • North America focus: Volvo is massively expanding capacity for crawler excavators – this could improve European delivery times in the medium term if Shippensburg also produces for export.
  • China strategy changes: Those who previously relied on cheap SDLG-Volvo cooperation machines must reorient themselves. Volvo is focusing on premium segments.

Jernberg remains committed to his conviction: "Electro is still the mission." Whether the S-curve comes in 2027, 2030, or later – Volvo CE wants to be ready when the market tips. For practitioners, this means: those who invest in electric now benefit from mature products and TCO advantages – but must be able to bear the acquisition costs. Those who wait save money today but lose experience and risk being unprepared for regulatory tightening (emission zones, noise protection).

Read more about the electrification strategy in the topic portal Electrification of the construction site.