Written by / Zhu Lin
Editor/ Zhang Linyu
Design / Shi Yuchao
Source/Forbes, Cummins, by Alan Ohnsman, Cummins Staff
On February 22, local time, Cummins and Michi jointly announced that the two sides have reached an agreement that Cummins will acquire parts manufacturer Mactus for $3.7 billion.
Thomas Linebarger, CEO of Cummins, said: "Combining the technological strengths of both companies will help us solve one of the most critical technology challenges today: developing economically viable zero-carbon solutions for commercial vehicle and industrial markets. ”
"Disproportionate" unity
Headquartered in Polis, Indiana, Cummins' sleek cantilevered steel-glass office tower looks more like a technology company than a company that survives on diesel fumes.
This "disproportionateness" also continues in Columbus, Indiana, where Cummins was born a century ago, with the company's foundation funding local schools, fire stations and libraries, using such cutting-edge designs from I.M. Pei and Eero Saarinen.
The leading U.S. diesel engine manufacturer happens to be run by a Silicon Valley man with an engineering degree from Stanford University, which is another surprising "out of proportion."
But it's also entirely relevant: The battle for the truck engine market will be in the environmental space, and Cummins will be competing with the seemingly greener electric truck upstarts.
Lambert, who spent a decade as CEO at Cummins, said let the horse come.
Cummins CEO Lambervin
"Teslas aren't going to drive our economy," he said, "and they're only going to drive the rich." ”
Cummins is thriving precisely because diesel engines are becoming more stringent as environmental rules become more stringent. When the day comes when pure electric or hydrogen trucks completely replace diesel, Lambervin will be ready.
The environmental challenges of diesel are considerable. In addition to carbon dioxide, diesel also emits black smoke, which can cause heart and lung disease, as well as smoke and acid rain. California requires that by 2024, commercial fleets begin replacing diesel trucks with zero-emission trucks. The U.S. Environmental Protection Agency intends to gradually impose stricter requirements for heavy-duty trucks starting in 2027.
To thrive, Cummins has been developing clean diesel systems for the past 20 years to meet stricter pollution rules. It reported $2.1 billion in net income in 2021, with revenue up 21 percent to $24 billion. Its market capitalization is $30.5 billion.
The transition from diesel fuel to clean energy in the heavy-duty vehicle market will not be quick or cheap. The winner in the long-haul transportation market may not be the pure electric truck that Elon Musk has promised, but perhaps the engine that burns hydrogen, which comes from renewable sources. Given the lithium mining of batteries, and the power grid for charging (powered in part by fossil fuels), it's quite possible that one day Cummins' trucks will be greener than Tesla's.
Green Engine Wars
For Lambervin, running a manufacturer doesn't seem like someone from a background like him originally envisioned. He grew up in a working family in Silicon Valley, a region defined by IBM and HP, not Apple and Google.
His parents divorced when he was very young, and his mother once survived on food relief. "She went back to school to complete her occupational therapy degree at San Jose State University, and let's move on."
Good public schools helped Rambovin get into Claremont McKenna College and Stanford University, where he earned an undergraduate degree in management and mechanical engineering. He then interned at Cummins while completing his MBA and Master of Manufacturing Science at Stanford University.
"I want to build companies, not fund them," he said. ”
Cummins is supplying heavy-duty hydrogen fuel cell systems to power zero-emission buses and passenger trains
Lambert, 59, began laying the groundwork for Cummins' transformation six years ago, acquiring companies with expertise in batteries, hydrogen and fuel cells and creating a new division dedicated to next-generation powertrains.
He estimates that these initiatives, along with Cummins' vast global customer base, will enable it to lead the market for clean trucks, buses, boats, trains, mining equipment and generators over the next decade and beyond.
"We need solutions that get things on the market – send you mattresses, send flowers, everything happens here." He said, pointing to a large window in the conference room, which was soaked in a winter rain in Indianapolis. "One solution is impossible. No one knows better than we do how many solutions are needed. ”
Because Cummins' product line is so large, it is necessary to take many different approaches. Each year, Cummins produces more than a million heavy-duty engines that power buses, Dodge pickups, Kenworth semi-trailers, Bradley M2 infantry fighting vehicles, Siemens trains, trawlers, miners and backup generators in data centers.
New Power – Cummins' "New Power"
Lambervin's strategy to further reduce exhaust gas pollution is multi-pronged, mixing traditional and high-tech options.
Cummins' engineering team plans to continuously improve the efficiency of its diesel engine and generator production lines, while also designing them to burn cleaner fuels, including natural gas and hydrogen made from renewable resources.
They're also preparing hybrid options, like Toyota's Prius, to improve fuel efficiency without the need for huge batteries from purely electric trucks.
"Today, we use existing big data and analytics technologies to design efficiencies into systems that we couldn't have done 10 or 15 years ago. Our goal is to increase the efficiency of our engines by 20% or 25% by 2030. Lambert said.
"The next step is mainly fuel. At this point, it has nothing to do with the engine. Once you have perfect efficiency, it's hybrid and fuel. ”
Lambert created a New Power division at Cummins in 2018 to design battery and fuel cell powertrains, as well as hydrogen power generation technologies that could replace its diesel business in 2030.
To support the division, Cummins acquired fuel cell and hydrogen developer Hydrogens, took a stake in Sion Power to develop lithium-metal batteries, and formed a joint venture with Sinopec to produce hydrogen from renewable sources.
Under amy Davis's leadership, New Power initially focused on batteries and motors for light and medium-duty trucks, as well as hydrogen fuel cell systems for railway applications and stationary power generation. Long-haul hydrogen-fueled powertrains for semi-trailers are being developed, but may not be a core business until 2030, she said.
When Davis and Lambervin attended a climate change conference in Scotland in November 2021, she said fleet operators "began to think about last-mile trucks" as battery packs and light commercial vehicle products advanced, but were concerned about diesel systems replacing semi-trailers and heavy-duty trucks.
Cummins' customers worry that pure battery systems, such as Musk's planned 500-mile half-trailer, are unrealistic. It is not only the size of the battery that hinders it, but also the lack of charging stations.
Davis describes when a customer asks, "What about my long-haul shipping?" Given the existing charging system, I can't even charge my three trucks at once. So, what do we do? Her answer was: "The fuel cell electric drivetrain can complement the battery currently in use." ”
Like truckmakers including Daimler, Volvo and startup Nikolai, Cummins believes battery power is a viable option for heavy-duty trucks that only need 200 miles of range per day, such as those hauling goods from ports or delivering on fixed routes.
But for trucks that need to travel 300 miles or more between refueling, hydrogen power looks more attractive, especially since hydrogen fuel cell systems are lighter than battery packs. Hydrogen is also filled with shorter times, comparable to diesel filling times.
Cummins reported sales of $116 million from New Power in 2021. That figure is a fraction of the company's total revenue, but more than the combined sales of commercial electric vehicle makers Rivian, Arrival and Nikolai, which are just beginning to deliver fleets.
Cummins' advantage
Matthew Elkott, co. co., who runs Cummins' business, said Lambervin's path looks right, combining the steady efficiency gains of traditional engines with next-generation technology in preparation. "We don't yet know what will become the most prevalent technology in 10 or 20 years, but Cummins will help a lot of customers migrate in any direction for the future."
Cummins is building a beta version of the heavy-duty hydrogen-powered system for semi-trailer trucks
Tesla has already scheduled thousands of potential customers for the Semi semi-trailer unveiled in 2017, and that's at least two years behind schedule. Given Tesla's lack of experience working with large fleets, Elket is skeptical about how big a player Tesla or Nikola will be in the commercial truck space.
"The advantage of Cummins over companies like Tesla is the existing base of cooperation among customers around the world, many of whom have been dealing with Cummins for decades," Elcott said. If the company says it has a convincing hydrogen-powered product and provides it with the fuel it needs to power it, it's likely to be taken seriously by the companies it already supplies. If I were that client, I would be more likely to choose Cummins over a new company entering the market. ”
Like other long-established global manufacturers such as Ford, Toyota and Harley-Davidson (in which Lamberon serves on its board), Cummins sees engineering innovation at the heart of its history.
Cummins was founded in 1919 by Clessie Cummins to advance rudolf Diesel's revolutionary engine.
The company initially obtained design licenses from a small company in Michigan and then developed its own direct-injection diesel engines that could power water pumps, grain grinders or saws.
By the 1930s, Cummins had entered the truck market with Model H engines and became the industry standard.
"Cummins does its best when it needs to innovate," Lambervin said, "and once the industry is shaped on a certain technology, then you're just competing for scale and cost." ”
The Clean Air Act of 1970 in the United States forced diesel engine manufacturers to improve their products, which ultimately boosted Cummins' business, which was able to quickly bring cleaner engines to market. Lambervin expects similar results as decarbonisation requirements become more stringent.
"Decarbonisation is a growth opportunity for Cummins in my opinion because now innovation is going to become very important," he said. Innovation is what we do so that we don't have to compete by increasing the sales of low-priced products. ”