CUMMINS

Primary competitors are main customers: Daimler, Volvo, Paccar and Navistar.

Hydrogen:

- NIKOLA: heavy-duty trucking. Electric motors running on hydrogen fuel cells. Fuel cell
is like a battery that doesn’t runo ut as long as fuel is supplied to it and uses chemical
energy to create electrical energy using catalysts.
- Paccar: heavy-duty trucking. Vertical integration.
- Ballard Power
- Plug Power
- Air Products
- CUMMINS: bought Hydrogenics in 2019. July 28 reports.
- Hylioon: sells powertrain solutions to truck makers (more analogous to Cummins).
Natural gas instead of hydrogen: more charging stations.
https://www.barrons.com/articles/tesla-nikola-hyliion-ev-truck-electric-stock-
51593121114
- Penske Automotive
- Ryder
- Navistar International: https://www.barrons.com/articles/navistar-offers-a-low-price-
a-clean-balance-sheet-and-a-possible-suitor-51546650001 ventureed into engine
making and didnt go well. It then switched to CMI.
- Traton

Battery (smaller) vs hydrogen fuel cells (larger).

Challenge: long haul electric trucks without generators must have lots of batteries,
compromising towing capacity (too heavy).

Hydrogen is burned like diesel fuel or natural gas but it does not emit the greenhouse gas
carbón dioxide. High energy density and fast refueling times.

Environmental tax credits + helps transportation companies meet environmental standards.

Support from lawmakers: California passed a law requiring more zero-carbon-emission trucks.
EU: subsidies too.

https://www.barrons.com/articles/hydrogen-fuel-trucks-nikola-green-energy-51595430426?
mod=hp_DAY_Theme_1_3

BUY AMERICAN: Both Biden and Trump.

Cummins relationship to oil prices? Trucking is very very cyclical? But supported by online
consumer shopping?

10% sales in China (with JV too!). Other 30% overseas. 1/3 of market share in heavy duty
trucks in North America. 80% médium duty trucks. Threat: battery-powered electric trucks.
Investments in electrification: https://www.barrons.com/articles/buy-diesel-engine-maker-
cummins-stock-because-of-electrification-51551353400
During financial crisis 50% fall of operating earnings.

Makes diesel and natural gas engines. Power generators (generators for homeowners after
disasters to backup power units usted by companies) and more. After-treatment products
(cleaners?).

https://www.barrons.com/articles/why-engine-maker-cummins-will-climb-30-51544551732:
changes in exec compenjsation program, replace ROE with ROIC as target for long term
incentives.

Sensitive to tariff wars?

https://www.barrons.com/articles/cummins-not-so-fast-tesla-1497539657: in 2017 it said it

planned to start production of electric power trains for transit buses in cities around 2019 and
expand into other industrial and comercial uses down the road as battery range for electric
vehicles increases. Big 3 concerns: cost, weigh and range.

https://www.barrons.com/articles/at-cummins-theres-still-plenty-of-gas-in-the-tank-
1416020759: trucks are made to order so a customer buying a truck can order a Cummins
engine. The end user chooses; “all the mechanics in the country were brough up with
Cummins engines”.

Push for less globalization in factories and bringing them closer to where final goods are sold.