Views: 0 Author: Alan Adler Publish Time: 2023-03-13 Origin: https://www.freightwaves.com/news/cummins-brands-new-power-division-as-future-tech-focused-accelera
Cummins Inc. is rebranding its New Power division as Accelera to get more credit for embracing a portfolio of zero-emission propulsion technologies instead of just improving diesel powertrains.
The global power and technology provider is concerned that the public thinks of it primarily as a maker of diesel engines, which has been its identity for more than a century.
Cummins has spent $900 million in research and technology, capital and acquisitions to build a business segment focused on making components and integration of batteries, hydrogen fuel cells, electronic axles, traction drive and hydrogen-making electrolyzers. The New Power name replaced Cummins’ electrification unit in November 2019.
“Establishing Accelera reinforces our commitment to leading in zero-emissions solutions and highlights our unmatched ability to leverage our deep understanding of our customers’ needs and applications, technical expertise and extensive service and support network,” Cummins CEO Jennifer Rumsey said in a news release.
Rumsey and Accelera President Amy Davis unveiled the new brand in Washington, D.C., on Wednesday. The goal: gaining recognition for its Destination Zero initiative to make only zero-emission products by 2050. Cummins is based in Columbus, Indiana, a small Midwestern city an hour south of Indianapolis.
Accelera already is a global leader in zero-emissions technologies. It provides battery electric and fuel cell electric products for commercial and industrial applications. Hundreds of Cummins’ electrolyzers generate hydrogen around the world.
Rebranding and splitting off new technology businesses is not new among industry suppliers. In December 2017, Delphi Automotive renamed itself Aptiv to focus on autonomous technologies. It completed a tax-free spinoff of Delphi Technologies, which housed its traditional businesses. BorgWarner Inc. purchased Delphi Technologies for $3.3 billion in October 2020.
BWA itself is now splitting off most of those businesses to focus on growing its electrification portfolio. Cummins has pursued a similar strategy in bulking up New Power through several mergers and acquisitions. Its biggest play was last year’s purchase of Meritor Inc. for $3.7 billion. It picked numerous component businesses and Meritor’s respected e-axle unit.
In June 2020, Spartan Motors Inc. announced a corporate name change after 45 years to The Shyft Group Inc. following the divestiture of its emergency response unit. Like Cummins, Shyft retains its expertise in work trucks, specialty service and delivery vehicle markets that generate most of the company’s revenue while it focuses on battery-powered vehicles like its Blue Arc line of Class 3-5 vans.
“Launching this new brand drives additional focus in our business and enables us to stay ahead of the ever-changing zero-emissions landscape,” said Davis, who became president of New Power in 2020.
Cummins has patiently invested in the former New Power division, and its revenues are growing. But it will likely be several years before Accelera breaks even on an earnings before interest, taxes, depreciation and amortization basis, according to Cummins CEO Mark Smith.
Making Accelera a sub-brand to the Cummins name distinguishes it from Cummins’ other business segments — engines, components, power systems and distribution.
“At some point the low-carbon thing becomes the main thing. And [diesel] becomes the niche business,” Tom Linebarger, Cummins’ executive chairman and retired CEO, told FreightWaves in a December 2021 interview. “I think diesel engines will be around for our kids’ full adult lives. But it will move from the main thing to a place that it operates in some places.”
Accelera jumped out of the gate with announcements of two new pieces of business:
Develop a 90-megawatt proton exchange membrane electrolyzer system for Varennes Carbon Recycling’s plant in Quebec, Canada. The project will be Cummins’ largest electrolyzer project so far in advancing a green hydrogen-based economy in North America.
Accelerate electric school bus production with Blue Bird Corp. to power a new fleet of 1,000 electric school buses across the U.S. over the next 12-18 months. It would more than double the zero-emissions school buses the companies have put into operation.