LCF Member in the News: 10 questions for Cummins' head of electrification

    Originally published by Katie Fehrenbacher | July 16, 2019 | GreenBiz | Original Article

    Cummins, the giant engine and powertrain maker based in Columbus, Indiana, turned 100 this year. Over the last century it's become a dominant player in delivering diesel engines and gear to its partners such as global truck and bus makers. The company says its diesel engines power seven out of 10 trucks on U.S. roads.

    But lesser known is that over the past few years Cummins has begun to strategically build out a business around electric trucks and buses, building power trains, hybrid engines and even battery packs for big OEMs such as Gillig, Hyundai, United States Postal Office and Paccar. This year Cummins is focused on electric school and transit buses, and it's eying early markets for electric delivery trucks and electric drayage vehicles (trucks that move containers from ports or railyards). 

    To learn more about what Cummins is doing with its electrification division — a 300-person group with a $500 million budget over a three-year-period — I jumped on the phone with Cummins head of electrification Julie Furber earlier this year, and we chatted about the market for electric trucks (Furber also will speak on the main stage at our VERGE 19 event).

    Katie Fehrenbacher: Can you talk about the development of the electrification business at Cummins?

    Julie Furber: Cummins has been involved with electrification in one way shape or form for many years. We have the powergen business. We’ve been developing engines for hybrid applications for several decades. We also created a hybrid business, really focused on China, about 10 years ago. Also, for the last, maybe, about five or six years, we’ve been working on various R&D programs around fully electric and hybrid vehicles. But it’s really over the past three years that we’ve really set it into motion as a commercial entity.

    Fehrenbacher: How do you see the market for electric trucks and commercial vehicles in 2019? Is it still at an early stage or are we reaching some kind of tipping point for mass commercialization?

    Furber: I think all the signs are positive and we are moving toward adoption. I think in 2019, we’re still at the beginning. I think areas like buses and school buses are moving fairly quickly now. But I still do think in trucks that we are at the infancy of real adoption.

    I think we’ve relied on two or three key indications in the marketplace. We always talk about regulation and I think Nox and greenhouse gas regulation will be a big driver of adoption. But we’re still waiting for those and 2024 and 2027 will be key dates for changes in regulation. At this point, we’re looking at what California will do and what the whole of the U.S. will do. I also think as we move forward that the total cost of ownership is a key piece of where we’re going.

    I think fleets and OEMs are trying out things in trucks, rather than we see wholesale adoption. I think it [electric trucks] definitely work for smaller ranges and certainly vehicles that come back at night in order to charge.

    There is also pull from end customers with trucks. We are starting to see customers who have sustainability as one of their key goals. They’re really starting to pull through the fleets.

    But I think the total cost of ownership model is still not quite there yet. We still need subsidies and grants to make that case for the economic payback.

    Fehrenbacher: How big is the electrification division at Cummins?

    Furber: We are selling units. Predominantly into school bus right now. We’re very close to launching in transit bus. So our partner in transit is Gillig, and we’ll be making a press announcement about that.

    In terms of our overall business, we are now over 300 people. We have eight locations in four countries and of those 300-plus people, over 200 of those are engineers. So we’re very focused on launching product. We’ve also quite a few announced partnerships with key OEMs in different applications. So Gillig in transit bus, Blue Bird in school bus, Kalmar in tractors — really some high-profile OEM customers. We’ve also done some trucks for the U.S. Postal Service. We’ve worked with Daimler and Paccar. We’ve worked with a lot of prolific OEMs and customers.

    Fehrenbacher: Do you see the OEMs starting to be more aggressive on EVs? There’s a lot of small startups making these for certain applications.

    Furber: Yeah. I think they’re looking at two signals. I think they’re looking for signals from their customers. So they want to know that there are customers out there that want the electric trucks and are willing pay for electric trucks. Then I also think they’re looking at regulatory framework to see where that goes. Reductions in greenhouse gas certainly in Europe and China are very much seen as a driver toward electrification. There’s a bit of "what’s the right technology to meet regulations," but also how does the economic payback work for the end customer.

    In the absence of either of those, it really then just comes down to the people who are willing to pay the premium to be zero emissions or to support climate change. Therefore, that’s more difficult in the absence of economic payback.

    Fehrenbacher: Cummins has such a long history in the development of the diesel engine. What are the challenges and opportunities with that history for electric vehicles? 

    Furber: The good news is that diesel has been the preferred answer to every application in the industrial and commercial world. But Cummins is very aware that that is now changing.

    Really, it won't be a one-size-fits-all solution going forward but a multitude of solutions will meet the needs of the customers. So I think we feel very well placed. Our understanding of the applications, markets, environments, how operators and drivers use the equipment and vehicles, really puts us in a really good position. For 100 years all we’ve invested in is powertrain. That’s all we do, we power people’s equipment and vehicles. So we feel like this is a solution for us rather than a complete pivot for our company. 

    It's an evolution of what we’ve done for 100 years. We went from manual and mechanical to electronic engines, to the whole last 20 years of emissions changes, and we’ve been at the forefront of innovating. This is a continuation of that.

    What we’ve been able to do is leverage capability from our company and put that into electrified power businesses. Things like control and integration systems, thermal management, are all skills and capabilities we have in our internal organization. We’ve been able to supplement that with areas where we didn’t have a good experience in. So we acquired two battery companies to get our foundational capability in batteries. We’ve been doing a lot of work around power electronics and other areas of the powertrain. So we are well set up to offer high quality, robust solutions for the market place, but also able to leverage Cummins footprint in manufacturing and service and support, and to really make us capable of serving our customers at a global scale.

    Read the full article on the GreenBiz website