Cummins expects big growth from its alternative-fuels business
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Columbus-based Cummins Inc. (NYSE: CMI) expects to see big growth in its alternative-fuels business over the next several years, but the path from here to there is a bit unclear, CEO Jennifer Rumsey said this week.
“By 2030, we’re going to see a lot of change starting to happen” with regards to adoption of emerging technology, Rumsey said at Tuesday’s Green Truck Summit. Rumsey was the keynote speaker at the event, which was held at the J.W. Marriott in downtown Indianapolis in conjunction with this week’s Work Truck Summit trade show at the Indiana Convention Center.
In recent years Cummins has invested more than $900 million into what has been called its New Power unit, which encompasses emerging power sources such as electrification and hydrogen. That figure includes research and development, capital investments and corporate acquisitions.
The unit, which Cummins this week rebranded as Accelera by Cummins, currently represents a small fraction of the company’s overall revenues. Rumsey told summit attendees that Cummins expects to bring in between $350 million and $400 million this year from Accelera.
As a point of comparison, Cummins reported total revenue of $28 billion—a company record—in 2022. Of that total, $176 million—less than 1%—came from what is now the Accelera segment.
But by 2030, Cummins expects its Accelera revenue to be between $6 billion and $13 billion, Rumsey said. The wide range reflects the uncertainty inherent in the transition to alternative fuels.
“The reality is, the rate of adoption of these technologies is uncertain,” Rumsey said, while adding that Cummins also expects to see growth in other part of its business.
Especially as the technologies continue to emerge, Rumsey said, Cummins expects that its customers will use a variety of different options depending on their needs. “Many different solutions will coexist.”
Factors ranging from the capabilities of a particular technology to the cost of implementation and the availability of supporting infrastructure all play a role in which technology will best suit a customer’s needs, Rumsey said.
As the industry continues to evolve, Rumsey said, regulations and public incentives will also be important. She cited the Infrastructure Investment and Jobs Act, signed in late 2021, and the Inflation Reduction Act of 2022 as two sources of federal funding that will help boost green-energy technologies.
Rumsey also mentioned a Cummins-led project that will develop battery charging and hydrogen fueling stations for medium- and heavy-duty vehicles along Interstate 80 in Indiana, Illinois and Ohio. The project will receive $1.25 million in federal funding through the 2021 infrastructure bill. It was among seven similar projects around the country that will share a combined $7.4 million in funding, the U.S. Department of Energy announced last month.
Discussion of alternative-fuel technologies hasn’t been limited to the Green Truck Summit. Many companies have been touting their new technologies all week at both the Green Truck Summit and at Work Truck Week.
Several manufacturers, including Mack Trucks, Isuzu, Ram Commercial, Hino Trucks, The Shyft Group, Workhorse Group and Bollinger Motors, all unveiled electric vehicles at the event this week.