Cummins has created an electrification division, which will lead the global diesel engine major's drive into the electric mobility age. $500 million (Rs 3,363 crore) is to be invested in this business over three years.
How is the new electrification division leading the transformation for Cummins?
Our intention is to provide fully electric and hybrid electric powertrains. We are doing that through a combination of utilising skills and capabilities we already have in the organisation and augmenting that with an acquisition to add to our capabilities. We recently acquired two battery development companies, so that's going to enable us to have a product out on the road in buses (North American OEM) by the end of 2019.
Would you also look at the India market for any inorganic move?
Certainly, we will definitely keep a watching eye on what's happening in India. There's a lot of activity with the government putting out targets when electrification will happen here. So, we are very interested. We are putting up a small team here to develop some product and, hopefully, have some demo product out pretty soon. Then, eventually, as volume starts to build here, we would certainly look for some manufacturing here.
That team, I assume, will be part of the Pune technical centre?
Yes. The technical centre in Pune will eventually house up to several thousand engineers. Some of them will be part of the electrification business team.
How big will be this electrification team in India?
Initially, maybe, we will put 6-10 engineers to work on products. But I can see that growing pretty quickly.
As I understand, though electrification as a propulsion technology is the same, the dynamics are very different in the commercial vehicle sector. How different would it be, and how different would the business dynamics be?
You are spot-on there. The work that a commercial vehicle needs to do is way different than the work of a passenger car. So, the durability and the longevity of the product need to be very different. The batteries have to be different, the motor certainly needs to be different, the controls and the power electronics need to be very different as well to do the work required by a commercial vehicle.
We don't see many examples of adoption of electrification for commercial vehicles yet. How does Cummins see this playing out?
I think it will come in phases. So, there are some phases, some of those applications where the capability and technology today is suitable, and also the cost of the technology today works. So, good initial applications for us are things like transit buses that operate in cities. Our first products would be geared towards that market. We are also seeing that some other niche markets like underground mining and forklifts are starting to develop, and then I think we need improvements in technology, cost and also charging infrastructure. And, maybe, a regulation that will drive adoption in other markets as we go forward.
At Auto Expo 2018, Cummins offered a sneak peek into its electric powertrain tech for CV operations with an aim to complement its clean-diesel, near-zero natural gas and diesel-hybrid products.
I think, for a while, it will be a push around city applications. Then eventually, a lot much longer term in some other segments. Cummins talks about the need for this variety of powertrain solutions for quite a long time, right from internal combustion engines through hybrids through fully electric and in the future, through fuel cells. But all of those would be required. We are moving from this one-size-fits-all to a world where a variety of solutions is what the customer needs.
It appears as a very long-term and smart transition strategy for Cummins. For example, a company may be the world's largest producer of a mechanical component but if the world moves to electric, it is no good.
Absolutely. You know we have been around for nearly a hundred years. Over that time, we have seen many changes, from mechanical engines to electronic engines, the introduction of emission regulations.
We see this as the next evolution of technology; Cummins is really a power provider and this is the next way to provide power. Like I said, in the future, I can see us investing in and bringing in fuel cells to commercial viability as well. We intend to be there for our customers with the right technology.
Nowadays, companies have to develop multiple technologies, some of which may or may not see the market introduction. In terms of preparedness, you have to be there.
Exactly. You have to be ready.
By that logic, do you foresee good scope for synthetic fuels also?
That is something we continue to look into. Like I said, we continue to look into a range of technologies and as and when those are ready we will bring them to market. Our research and development organisation is working on those
We were working on electrification for a couple of decades before we brought it to commercialisation. So, yeah, there's plenty going on there that may come to market at some point.
In India, how much scope do you see for the business that you are leading?
I think there's a lot of scope. I think there will be a particular focus around cities where air quality is a particular issue. So, I can see that's where things will start. But I do see there's definitely a push from the government and I see that the business will develop over time. I think it will be slow. It's hard – the technology, the costs, the infrastructure are not really there to make it move quickly but I think, as it moves I see it as a good opportunity going forward.
In the long term, which will be the key markets for electric commercial vehicles?
China is probably the one that's racing ahead of everyone else. There's also a lot of investment going on there. We see a lot of activity in Europe. In North America, we are seeing activity in particular regions and cities. California is a region that has a lot of energy and a lot of effort going into electrification.
Then we see things happening in various cities throughout the world. This would be different, in that we will probably see local regulations driving things as opposed to, what we are used to, the national emission regulations taking place.
(This interview was originally published in the 15 April 2018 issue of Autocar Professional)