‘Green’ heavy transport

By Alan Ohnsman

The elegant steel and glass cantilever of the offices of Cummins Inc. in Indianapolis is more like the headquarters of a technology company than a business that “lives” on diesel. The same “disagreement” in Columbus, Indiana, where Cummins was born a century ago and where the company’s foundation funds groundbreaking projects for schools, fire stations and a library.

The fact that the leading US diesel engine company is run by a Silicon Valley native with a degree in engineering from Stanford is also surprising. But it makes perfect sense: The “battle” for the truck engine market will be in the environmental field.

“Tesla is for the rich. It will not ‘drive the economy,'” said Thomas Linebarger, Cummins’ chief executive for the past decade. And when the day comes when batteries or hydrogen will completely replace diesel in trucks, Linebarger will be ready.

The 59-year-old CEO began laying the groundwork for Cummins evolution six years ago, acquiring companies specializing in batteries, hydrogen and fuel cells, composing a new division that focuses exclusively on the development of next-generation engines. She believes that these moves and Cummins’ global customer base will help her lead the market for cleaner trucks, buses, ships, trains, mining equipment and generators in the 2020s and beyond.

“We need solutions for freight. One solution is not enough. No one understands the scope of these solutions more than we do,” he added.

The wide range of approaches is necessary due to the huge range of products of the company. On an annual basis, Cummins supplies more than one million heavy-duty motor vehicles for buses, vans, military vehicles, Siemens trains, fishing boats, mining equipment, and backup generators for data centers.

The environmental challenges associated with diesel are significant. In addition to carbon dioxide, its combustion emits soot (cause of heart and lung disease), as well as precursors of smog and acid rain. California is pushing for the replacement of diesel trucks with zero-emission models in 2024. And the US Environmental Protection Agency intends to gradually impose stricter standards for heavy vehicles, starting in 2027.

So far, Cummins has thrived on its ability to develop cleaner diesel powertrains over the past 20 years, based on environmental standards. It is estimated that it had a net profit of $ 2.2 billion in 2021 and revenue of $ 24 billion, up 21%. Its capitalization amounts to $ 33.5 billion.

The transition from the diesel heavy vehicle market to cleaner fuels will not be quick or cheap. And the winner of the long-distance race may not be the battery-powered trucks promised by Elon Musk. They can be RES hydrogen combustion engines. Given the cost of lithium mining and the partly fossil fuel grid used to recharge a battery, it is possible that one day Cummins trucks will be greener than Tesla.

Managing an industry was not a “visible” goal for Linebarger. A child of a Silicon Valley working class family, at a time when IBM and Hewlett-Packard dominated rather than Apple and Google, he had a difficult childhood. His parents divorced when he was young and he and his mother temporarily came to live on food stamps.

Good public schooling helped Linebarger move to Claremont McKenna College and Stanford, where he studied business administration and engineering. He did his internship at Cummins while completing his MBA and MSc in Industrial Technology at Stanford. “I wanted to build companies, not finance them,” he says.

Linebarger’s strategy for reducing carbon and pollutant emissions is multidimensional: it combines conventional and high-tech methods. Cummins’s team of engineers plans to continue to improve the performance of diesel engines, while evolving them to run on cleaner fuels, such as natural gas and hydrogen from RES. They are also developing hybrid solutions, such as Toyota Prius.

“Today, with technology, big data and analytics, we can design more efficient systems in ways we could not 10 or 15 years ago. We aim to improve the performance of our engines by 20% or 25% by the end of the decade. “, says. “The next step is power; there is no significant further improvement in the engines. So hybridization and fuel.”

Linebarger established Cummins’s New Power Unit in 2018 to develop battery and fuel cell systems, as well as hydrogen production technology, to replace its diesel engines by 2030. To strengthen Hydrogenics acquired a stake in Sion Power to develop lithium-metal batteries and formed a joint venture with Chinese oil company Sinopec to produce hydrogen from RES. Led by Amy Davis, New Power will initially focus on batteries and engines for light and medium trucks, and on hydrogen cell systems for rail applications and power generation. It is also developing hydrogen engines for medium-distance long-haul trucks, but these will not be a priority until the late 2020s, says Davis.

Incentives and offers for light commercial vehicles make fleet managers “consider them as an option for the last mile”, but are concerned about replacing diesel engines in medium and heavy trucks, Davis says. Cummins customers are concerned that battery systems – such as those developed by Musk, up to 500 miles – are unrealistic. The problem is not only the size of the required batteries, but also the lack of charging stations. “The fuel cell system can, to a large extent, complement the batteries,” explains Davis.

Like truck manufacturers Daimler, Volvo and the fledgling Nikola, Cummins considers batteries a viable option for heavy-duty trucks traveling 300 miles[300 km]a day, such as those running from ports or regular routes. However, for trucks traveling up to 500 km between refueling, the use of hydrogen seems to be a more attractive option, as the fuel cell system is lighter than the battery system. And the hydrogen refueling time is equivalent to diesel.

Cummins estimates that sales of the New Power unit reached $ 130 million last year. This is a fraction of its total sales, but exceeds the total sales of commercial electric vehicle manufacturers such as Rivial, Arrival and Nikola, which have just started deliveries.

Matthew Elkott, who covers Cummins for Cowen & Co., points out that Linebarger’s path – of steadily improving the performance of conventional mobile phones while preparing next-generation technology – is the right one. “We do not know which technology will prevail in 10 or 20 years, but [η Cummins] “It will help move many customers, whatever the future.”

Tesla already has thousands of potential customers for the Tesla Semi it introduced in 2017, but it is at least two years behind schedule. But given the experience of electric vehicle makers in managing large fleets, Elkott is skeptical about how “big players” Tesla or Nikola will turn out to be.

“The advantage [της Cummins] Tesla’s, for example, is its global presence, and its customer relationship for decades, says Elkott. If the company says it has a competitive hydrogen system, it will probably be taken seriously by the companies it already supplies “If I were one of those customers, I would probably choose Cummins instead of someone new to the market.”

As for other traditional companies, e.g. Ford, Toyota and Harley-Davidson (of which Linebarger is a board member), engineering innovation is in Cummins DNA. It was founded in 1919 by Clessie Cummins to promote the revolutionary Rudolf Diesel engine, before starting to develop its own direct injection diesel engines, initially and project machines. By the 1930s it had entered the truck market with the dominant Model H engine.

1970 U.S. law that forced diesel engine manufacturers to cleaner products drove Cummins’s business, which was soon able to provide cleaner engines. Linebarger expects the same to happen with the new “enemy”: carbon dioxide.

“Carbonation is a growth opportunity for Cummins, because innovation is more important now,” he says. “We are developing innovation, so we do not have to compete for cost with millions of others,” he concludes.