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Accelera by Cummins Awarded $75 Million for Zero-Emissions Manufacturing from Department of Energy
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Cummins has secured a $75 million grant from the Department of Energy to convert 360,000 sq. ft. of its Columbus Engine Plant (CEP) for zero-emissions and electric powertrain systems manufacturing. This is the largest federal grant awarded solely to Cummins and part of the Inflation Reduction Act appropriations. Cummins will match the grant, investing a total of $150 million. The project aims to enhance the production of battery packs, powertrain systems, and BEV components for its zero-emissions segment, Accelera by Cummins. This initiative will create approximately 250 full-time jobs and result in significant greenhouse gas emission reductions. CEP will eventually house 350 employees dedicated to BEV-related work, converting nearly half of its 1.42 million sq. ft. facility. CEO Jennifer Rumsey and Accelera President Amy Davis highlighted this move as important for the company's Destination Zero strategy and commitment to a zero-emissions future.
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Cummins awarded $75 million DOE grant for zero-emissions manufacturing.
Total investment of $150 million in zero-emissions and BEV component production.
Creation of approximately 250 full-time jobs.
Significant reduction in greenhouse gas emissions by 2030.
Expansion strengthens Cummins' global position in electrified solutions.
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Insights
From a financial perspective, this significant investment and the matching funds by Cummins demonstrate a strong commitment to advancing their zero-emissions strategy. The allocation of $75 million from the Department of Energy, matched by another $75 million from Cummins, will effectively bolster the company's manufacturing capabilities for electric vehicle components. This could lead to increased revenues in the long term as the demand for zero-emission vehicles grows.
Moreover, the inclusion of approximately 250 full-time jobs could have a positive impact on the local economy and reflect well in Cummins' corporate social responsibility profile. However, investors should consider the short-term financial burden and potential risks associated with large-scale investments. The financial benefits will likely be realized over a longer time frame.
Key takeaway: While the immediate financial impact may not be positive due to the significant upfront costs, the long-term outlook remains promising. Investors should weigh this future potential against the current expenditure.
The investment in zero-emissions manufacturing aligns perfectly with current market trends toward sustainability and environmental responsibility. As regulatory pressures increase and consumer preferences shift towards greener solutions, Cummins' strategic move positions them favorably within the market.
This initiative also enhances Cummins' competitive edge in the electric vehicle component sector, potentially attracting new partnerships and customers who prioritize sustainability. However, the market for battery-electric vehicles is becoming increasingly crowded, with numerous players vying for dominance. Cummins' ability to leverage its established reputation and infrastructure will be pivotal in securing a significant market share.
Key takeaway: Investors can view this move as a strategic alignment with market trends, boosting Cummins' long-term competitive position. However, market competition should not be underestimated.
From an environmental standpoint, the conversion of manufacturing space for zero-emissions components and electric powertrain systems is a substantial step towards Cummins' Destination Zero strategy. The projected reduction of approximately 104 million metric tons of carbon dioxide by 2030 is noteworthy and aligns with global efforts to reduce greenhouse gas emissions.
The introduction of clean tech jobs and the focus on developing a skilled workforce for future technologies further underscore Cummins' commitment to sustainability and innovation. This move not only mitigates environmental impact but also demonstrates corporate leadership in addressing climate change.
Key takeaway: The environmental implications are highly positive, reinforcing Cummins' role as a leader in sustainability. This can enhance the company's reputation and appeal to environmentally-conscious investors.
Cummins to invest a total of $150 million in battery electric vehicle component manufacturing and job creation
COLUMBUS, Ind.--(BUSINESS WIRE)--
Cummins Inc. (NYSE: CMI) announced today that the company has been awarded $75 million to convert approximately 360,000 sq. ft. of existing manufacturing space at its Columbus (Indiana) Engine Plant (CEP) for zero-emissions components and electric powertrain systems. The $75 million grant is the largest federal grant ever awarded solely to Cummins and is part of the appropriations related to the Inflation Reduction Act.
Cummins will match the grant and invest $75 million for a total of $150 million to convert the space and expand production of battery packs, powertrain systems and other battery-electric vehicle (BEV) components for Accelera by Cummins, the company’s zero-emissions business segment. To support this additional manufacturing capacity, Cummins anticipates adding approximately 250 full-time jobs, with opportunities for the plant’s existing workforce to transition to many of these positions over time.
“This DOE grant is another step forward in the progress we are making toward a zero-emissions future and expanding battery manufacturing in the United States, strengthening our global position in electrified solutions for commercial markets,” said Amy Davis, President of Accelera by Cummins. “Today’s announcement represents a crucial step in advancing electrification and domestic battery supply chains. Partnership with government, customers, and the industry as a whole is required to accelerate the shift to zero. We are proud of this milestone and to be adding clean tech jobs to develop the workforce and communities of the future.”
After the completion of this project, CEP will house approximately 350 employees focused on BEV-related work. Nearly half of the 1.42 million sq. ft. facility, which opened in 1926, will be dedicated to zero-emissions manufacturing. The electric powertrains produced at CEP will result in greenhouse gas emission reductions of approximately 104 million metric tons of carbon dioxide by 2030.*
Through its Destination Zero strategy, Cummins is committed to helping customers seamlessly and successfully transition to a zero-emissions future and understands that a variety of solutions are required to reach this goal. The company is unique in its ability to meet customers’ needs wherever they are in their journey, offering fuel-agnostic engine platforms powered by advanced diesel, natural gas and alternate fuels; fully electric and hydrogen fuel cell solutions; and key components. Cummins continues to be committed to advancing all of these solutions.
"Known as Plant One, CEP was Cummins’ first engine plant in our headquarter city of Columbus, Indiana, and this grant from the DOE allows us to broaden the legacy of the site even further. By expanding the production of batteries and electric vehicle components at CEP, at the same plant where we manufacture blocks and heads for our current and next-generation, engine-based solutions, we continue to prove our commitment to Destination Zero and dedication to innovation, strengthening the communities we serve and environmental stewardship,” said Jennifer Rumsey, Chair and CEO of Cummins. “As a Columbus native, I am especially proud of the significant contribution Cummins is making to economic and social vibrancies of the local community alongside our broader goals of improving and decarbonizing commercial and industrial applications.”
“As a City, Columbus has benefited from Cummins’ innovative spirit and technology investments for over 100 years,” said Mary Ferdon, Mayor of Columbus. “This expansion by Accelera reinforces the commitment the company has made to clean energy and a more sustainable future. Columbus also benefits from the re-investment in our workforce and the conversion of CEP space for advanced technology. We’re excited about this $150 million investment which moves the company forward in its zero-emissions manufacturing and de-carbonization goals and we’re proud to celebrate this milestone award from the Department of Energy.”
*Emissions reduction of BEV compared to ICE heavy-duty commercial vehicles
About Cummins Inc.
Cummins Inc., a global power solutions leader, is comprised of five business segments – Components, Engine, Distribution, Power Systems and Accelera by Cummins – supported by our global manufacturing and extensive service and support network, skilled workforce and vast technological expertise. Cummins is committed to its Destination Zero strategy, which is grounded in the company’s commitment to sustainability and helping its customers successfully navigate the energy transition with its broad portfolio of products. The products range from advanced diesel, natural gas, electric and hybrid powertrains and powertrain-related components including, aftertreatment, turbochargers, fuel systems, valvetrain technologies, controls systems, air handling systems, automated transmissions, axles, drivelines, brakes, suspension systems, electric power generation systems, batteries, electrified power systems, hydrogen production technologies and fuel cell products. Headquartered in Columbus, Indiana (U.S.), since its founding in 1919, Cummins employs approximately 75,500 people committed to powering a more prosperous world through three global corporate responsibility priorities critical to healthy communities: education, environment, and equality of opportunity. Cummins serves its customers online, through a network of company-owned and independent distributor locations, and through thousands of dealer locations worldwide and earned about $735 million on sales of $34.1 billion in 2023. See how Cummins is powering a world that's always on by accessing news releases and more information at https://www.cummins.com/.
Forward-looking disclosure statement
Information provided in this release that is not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our forecasts, guidance, preliminary results, expectations, hopes, beliefs and intentions on strategies regarding the future. These forward-looking statements include, without limitation, statements relating to our plans and expectations for our revenues, EBITDA and the Settlement Agreements to resolve regulatory proceedings regarding our emissions certification and compliance process for certain engines primarily used in pick-up truck applications in the U.S. Our actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including, but not limited to: any adverse consequences resulting from entering into the Settlement Agreements, including required additional mitigation projects, adverse reputational impacts and potential resulting legal actions; increased scrutiny from regulatory agencies, as well as unpredictability in the adoption, implementation and enforcement of emission standards around the world; evolving environmental and climate change legislation and regulatory initiatives; changes in international, national and regional trade laws, regulations and policies; changes in taxation; global legal and ethical compliance costs and risks; future bans or limitations on the use of diesel-powered products; failure to successfully integrate and / or failure to fully realize all of the anticipated benefits of the acquisition of Meritor, Inc.; raw material, transportation and labor price fluctuations and supply shortages; aligning our capacity and production with our demand; the actions of, and income from, joint ventures and other investees that we do not directly control; large truck manufacturers' and original equipment manufacturers' customers discontinuing outsourcing their engine supply needs or experiencing financial distress, or change in control; product recalls; variability in material and commodity costs; the development of new technologies that reduce demand for our current products and services; lower than expected acceptance of new or existing products or services; product liability claims; our sales mix of products; climate change, global warming, more stringent climate change regulations, accords, mitigation efforts, greenhouse gas regulations or other legislation designed to address climate change; our plan to reposition our portfolio of product offerings through exploration of strategic acquisitions and divestitures and related uncertainties of entering such transactions; increasing interest rates; challenging markets for talent and ability to attract, develop and retain key personnel; exposure to potential security breaches or other disruptions to our information technology environment and data security; political, economic and other risks from operations in numerous countries including political, economic and social uncertainty and the evolving globalization of our business; competitor activity; increasing competition, including increased global competition among our customers in emerging markets; failure to meet environmental, social and governance (ESG) expectations or standards, or achieve our ESG goals; labor relations or work stoppages; foreign currency exchange rate changes; the performance of our pension plan assets and volatility of discount rates; the price and availability of energy; continued availability of financing, financial instruments and financial resources in the amounts, at the times and on the terms required to support our future business; and other risks detailed from time to time in our SEC filings, including particularly in the Risk Factors section of our 2023 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this release and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about factors that may affect our performance may be found in our filings with the SEC, which are available at http://www.sec.gov or at http://www.cummins.com in the Investor Relations section of our website.
