Cummins goes with tech­nol­ogy changes in In­dia: Julie Furber, Ex­ec­u­tive Di­rec­tor, Elec­tri­fi­ca­tion, Cummins Inc.

The US com­pany has spent a bil­lion dol­lars over the last 5 years to fall in line.

Auto components India - - Q&A - In­ter­view & pho­tos by: Ashish Bha­tia

Q: As an in-charge of the elec­tri­fi­ca­tion strat­egy at Cummins Inc., what is the role you play?

Furber: It is a global role look­ing af­ter elec­tri­fi­ca­tion as it gets adopted glob­ally. The pri­mary ob­jec­tive is to de­velop Cummins as a leader in elec­tri­fied power. That’s both in hy­brid pow­er­trains and elec­tric pow­er­trains, and through a se­ries of in­vest­ments, both ex­ter­nally and in­ter­nally to the busi­ness. It in­volves look­ing at or­ganic de­vel­op­ment, prod­uct launches in var­i­ous mar­kets and above all working with cus­tomers to iden­tify when and where are the hap­pen­ings in elec­tri­fied power.

Q: Which are the re­gions that are fast mov­ing to elec­tri­fi­ca­tion? There is a feel that all are at a sim­i­lar pace and in the same di­rec­tion.

Furber: China is mov­ing very fast and lead­ing the way. We are also see­ing a lot of ac­tiv­ity in Europe, and in In­dia the buzz is be­ing fu­elled by a lot of talks are re­volv­ing around elec­tri­fi­ca­tion, and the Gov­ern­ment is talk­ing about reg­u­la­tions that might fall in place. In other re­gions like North Amer­ica, it is largely Cal­i­for­nia and a city-driven trend mak­ing it a sort of na­tional ef­fort. Then there are pock­ets in South Amer­ica, and other far flung re­gions like New Zealand. At all the places we are see­ing a def­i­nite in­ter­est in elec­tri­fi­ca­tion. What we are yet to see is proper reg­u­la­tions be­ing im­ple­mented. We have seen some man­dates like in LA where by 2030 all buses must be fully elec­tric. We see pock­ets mov­ing to­wards elec­tri­fi­ca­tion but no con­crete reg­u­la­tions as yet. The eco­nom­ics is still working its way out.

Q: What did you show­case at the re­cent Auto Expo. What are your plans in In­dia?

Furber: With all the va­ri­ety of tech­nolo­gies, Auto Expo was a great place to show­case our port­fo­lio. We wanted to show that Cu­mins is a global leader in tech­nol­ogy. We also showed the di­ver­sity of tech­nol­ogy that we are go­ing to of­fer. It’s not go­ing to be a 1 size fits all strat­egy. For us we are of­fer­ing the right kind of so­lu­tion to the cus­tomer no mat­ter what that so­lu­tion may be. We will be there to lead in all those tech­nolo­gies. Spe­cific to In­dia, we’ve spent a bil­lion dol­lars over the last 5 years. As tech­nol­ogy changes, we want to con­tinue to po­si­tion our­selves in line.

Q: Among those tech­nolo­gies, which are all rel­e­vant to In­dia?

Furber: In terms of en­gines we have solutions in BS IV, most rel­e­vant to In­dia. Over 90,000 BS IV Cummins en­gines are out on the roads, lever­ag­ing our global ca­pa­bil­i­ties of emis­sions con­trol de­vices and en­gine con­trols to meet those re­quire­ments. BS VI is com­ing soon, and mar­kets are mov­ing very fast to­wards elec­tri­fi­ca­tion. The ad­van­tage for us is that we have fa­cil­i­tated com­pli­ance to Euro VI else­where in the world, we’ve got a lot of our prod­ucts in the mar­ket. We know how our prod­ucts are per­form­ing. Since we launched those prod­ucts, tech­nol­ogy has ad­vanced. So that’s re­ally our choice for the In­dian mar­ket as it moves rapidly to­wards BS VI where cost and fuel econ­omy are key driv­ers. Re­li­a­bil­ity and driv­ing up­time as­sur­ances to cus­tomers are also im­por­tant for us.

One of the other big op­por­tu­ni­ties that we see for us to give value to cus­tomers is with the com­po­nent care cen­tres where we are pro­vid­ing ded­i­cated ca­pa­bil­ity of spe­cial­ist ser­vic­ing of in­di­vid­ual com­po­nents that re­ally make a dif­fer­ence. Be­tween BS III and BS VI, there is no big change. Pis­tons and cylin­ders are the same. What’s chang­ing is the tur­bocharger, fuel sys­tem and the af­tertreat­ment sys­tem. At Cummins, we are able to bring in our global lead­er­ship in tech­nol­ogy not only for our own en­gines but for cus­tomers

look­ing to use our com­po­nents cou­pled with the ser­vice abil­ity to meet those re­quire­ments for the ad­vanced com­po­nents.

Q: How are you strate­gis­ing for In­dia, said to be mov­ing at a faster pace com­pared to global coun­ter­parts in new tech­nolo­gies like BS VI and elec­tri­fi­ca­tion?

Furber: That’s not with­out its set of chal­lenges. How is the charg­ing in­fra­struc­ture and the avail­abil­ity of sup­ply base go­ing to de­velop? I am in­ter­ested to see how the Gov­ern­ment en­cour­ages sup­pli­ers in In­dia, and at the same time deal with in­fra­struc­ture de­vel­op­ment. If all of them are not in­tro­duced at the same time, it could be chaotic.

Q: Is the gov­ern­ment do­ing enough to en­cour­age ad­vance­ment in tech­nol­ogy, for in­stance for EVs in In­dia. As a man­u­fac­turer are you mo­ti­vated to move fast enough, from con­cept to build­ing a mar­ke­tready so­lu­tion?

Furber: At least in au­to­mo­tive it’s hard to make the eco­nom­ics work. Bat­tery prices are a level where it is still hard to make a vi­able pay­back on an elec­tric pow­er­train ver­sus a diesel pow­er­train. I think the costs are com­ing down. If the Gov­ern­ment re­ally wants to push it quickly, there should be a sub­sidy, and en­cour­age­ment for in­vest­ment on sup­ply base. In­dia is very cost­con­scious, and so a lo­cal sup­ply base is go­ing to be crit­i­cal. At Cummins, we are keen on elec­tric man­u­fac­tur­ing but for that we need a sup­ply base. Diesel is eas­ier for us to lever­age our demon­strated global lead­er­ship in the cor­re­lated tech­nol­ogy. That gives the cus­tomers a cer­tain as­sur­ance be­cause the tech­nol­ogy is al­ready proven. It’s not just what Cummins can bring to the mar­ket, it’s also about the en­tire ecosys­tem.

We will see the pen­e­tra­tion of elec­tri­fi­ca­tion in cer­tain seg­ments but the places where the big­gest po­ten­tial in the near-term are the city cen­tres that are wor­ried about the air qual­ity. You are still just dis­plac­ing car­bon diox­ide emis­sions from elec­tric­ity gen­er­a­tion ver­sus an en­gine burn­ing it in the city. You dis­place the im­me­di­ate air qual­ity con­cerns. In Delhi you re­ally saw the im­pact on lo­cal air qual­ity. In cities you will see na­tional gov­ern­ment or lo­cal gov­ern­ment tak­ing ac­tion like in the US, and else­where May­ors tak­ing ac­tion to in­cen­tivise work in cities. The ben­e­fit for cities is that the ve­hi­cle speeds are low, the range is small, so it can off­set, to an ex­tent, the dis­ad­van­tages as­so­ci­ated with the bat­tery sizes that you need. That’s where it will head first.

Q: How do you counter crit­ics of elec­tri­fi­ca­tion? Many deem it as a pol­lut­ing tech­nol­ogy at the source of gen­er­a­tion?

Furber: It’s true. There are 2 rea­sons that you might go to ‘zero emis­sion’. One is the global im­pact on cli­mate change which is cer­tainly de­pen­dent on elec­tric­ity gen­er­a­tion. But also, ev­ery day elec­tric­ity gen­er­a­tion is get­ting cleaner with newer re­new­ables be­ing in­tro­duced in the process. Even if the im­pact is not as vis­i­ble to­day, in the fu­ture it will be no­ticed. An­other rea­son to do it is the lo­cal need for air qual­ity im­prove­ment. In the near-term that will cer­tainly have an im­pact and elec­tric­ity gen­er­a­tion will be­come cleaner.

Q: What is the rel­e­vance of Cummins tech­nolo­gies like the range ex­tended to the In­dia mar­ket?

Furber: In terms of tech­nol­ogy, where is the charg­ing in­fra­struc­ture to­day, the range ex­tended pro­vides the flex­i­bil­ity to deal with the short­com­ings in what the full elec­tric tech­nol­ogy is do­ing to­day. There is no way to in­tro­duce a fully elec­tric truck to­day in Mum­bai. There is just no

in­fra­struc­ture for that. The charg­ing times are too long. May be a range ex­tended so­lu­tion would en­able Mum­bai and Pune to go the ze­roe­mis­sion way, and then may switch to a diesel en­gine in be­tween. It can of­fer you the flex­i­ble so­lu­tion that in the short to medium term is vi­able in the mar­ket­place with­out im­prove­ments in the range of bat­tery packs, the size, and also the charg­ing in­fra­struc­ture.

Q: Tell us about your re­cent part­ner­ships to op­ti­mise bat­tery tech­nol­ogy?

Furber: When we started the elec­tri­fi­ca­tion busi­ness, one of the gaps in our own ca­pa­bil­i­ties was the bat­tery tech­nol­ogy which is crit­i­cal to elec­tri­fi­ca­tion. Not only the bat­tery cell but the in­ter­ac­tion with the rest of the sys­tem. In­te­gra­tion and the bat­tery man­age­ment soft­ware are very crit­i­cal. We had to add ca­pa­bil­ity to our or­gan­i­sa­tion quickly to ad­dress that gap. We feel very good about our 2 re­cent strate­gic ac­qui­si­tions. We’ve got Brammo which has the ex­per­tise in low volt­age tech­nol­ogy, heavy duty offhigh­way type ap­pli­ca­tions, and then we have added John­son Matthey’s UK au­to­mo­tive bat­tery sys­tems busi­ness, a sub­sidiary of John­son Matthey that spe­cialises in high-volt­age au­to­mo­tive­g­rade bat­tery sys­tems for elec­tric and hy­brid ve­hi­cles be­sides a good knowl­edge in bat­tery ma­te­ri­als. So that gives us a good foun­da­tion. We will build on that by hir­ing ad­di­tional re­sources and set­ting up man­u­fac­tur­ing fa­cil­i­ties. It gives us a very good ini­tial base to build on as we go for­ward be­sides the in­vest­ments in other ar­eas of elec­tric pow­er­train.

Q: What is the scope of hy­brid­electrics?

Furber: Hy­brids present a very good mid­dle so­lu­tion. You can have a small bat­tery where cost is not pro­hib­i­tive. I think it gives you flex­i­bil­ity in charg­ing times, and in­fra­struc­ture. It al­lows you to up­grade to zero emis­sions. It makes a big dif­fer­ence in city in­te­ri­ors given the fre­quent stop­starts, and then switchover to the diesel en­gine in a more open en­vi­ron­ment. To­day it gives the best of both worlds.

Q: Can elec­tri­fi­ca­tion co-ex­ist with other tech­nolo­gies in the fu­ture?

Furber: Elec­tri­fi­ca­tion, may be over the next 10 years, will rep­re­sent a small pro­por­tion of our busi­ness. It is gain­ing a lot more vis­i­bil­ity with the hype sur­round­ing it. But there will be place for fully in­ter­nal com­bus­tion en­gines, some elec­tri­fi­ca­tion, more main­stream hy­brids and then fully electrics. In the back­ground when we pre­pared for elec­tri­fi­ca­tion, we also worked on fuel cell tech­nol­ogy. We will bring it to the com­mer­cial mar­ket when the time is right. The idea is to have a range. It won’t be a one size fits all where cus­tomers will need dif­fer­ent solutions for dif­fer­ent needs and we will of­fer them. The one thing of­ten over­looked is the charg­ing time and the charg­ing in­fra­struc­ture be­cause even in mar­ket seg­ment where it gets an at­trac­tive to­tal cost of own­er­ship, if your busi­ness model de­mands 24x7 op­er­a­tion then you’ve got a real prob­lem. The only way then to sus­tain is by buy­ing a more ex­pen­sive high­power bat­tery charge so­lu­tion. There will be a spec­trum based upon use case even within the seg­ment, and there will be a spec­trum across seg­ments as to what will be the right tech­nol­ogy as a func­tional type. As bat­tery tech­nol­ogy gets cheaper, there will be a big­ger op­por­tu­nity space. But there is still go­ing to be an area where the need for power den­sity and the abil­ity to op­er­ate con­tin­u­ously will play a cru­cial role in cus­tomers de­cid­ing for or against a tech­nol­ogy.

Q: How much you in­vest in R&D an­don the pro­grammes like the Su­perTruck? How do you see the im­pact on com­mer­cial vi­a­bil­ity over the near to medium term?

Furber: The Su­perTruck is a re­search project in the US. The frame­work is that it is set up on a very spe­cific set of key de­liv­er­ables

and mile­stones. The way we are pur­su­ing that is through ad­vanced en­gine tech­nolo­gies like mild hy­bridi­s­a­tion and be­yond. Then it is about part­ner­ing the truck side where it is about to­tal freight ef­fi­ciency. Re­duc­ing the weight of the truck and im­prov­ing er­gonomics are the key fo­cus ar­eas. It is a great space for us. Our first Su­perTruck project al­lowed us to de­velop a broad spec­trum of tech­nolo­gies, some of which have al­ready made it to the mar­ket. You look at Cummins ad­vanced pow­er­train tech­nol­ogy, they di­rectly flowed out from the Su­perTruck project into our prod­uct port­fo­lio.

There are other tech­nolo­gies that we pi­o­neered in the Su­perTruck that may not ever make it to the mar­ket. Su­perTruck 2 is pretty much like that. The way the project is struc­tured, the way the de­liv­er­ables are in­structed, it pushes us very hard in some ar­eas to ex­plore in­ter­est­ing and novel tech­nolo­gies. Some of which will di­rectly go into our prod­ucts, oth­ers may take a decade or more to see the light of day in In­dia in a com­mer­cial ap­pli­ca­tion. The Su­perTruck 2 is em­pha­sis­ing less on the high-power hy­brid and more on mild hy­brids. We just need to con­tinue in­vest­ing in these other places like higher en­ergy hy­brids and range ex­tended solutions from an or­ganic de­vel­op­ment point of view. Also to be able to look at in­or­ganic op­por­tu­ni­ties, ac­qui­si­tions such has John­son Matthey is com­ing on board.

Q: How are you strength­en­ing your R&D ca­pa­bil­ity by in­vest­ing in new tech­nol­ogy cen­tres?

Furber: Elec­tri­fi­ca­tion is cer­tainly a big piece of the new tech­nol­ogy cen­tre in Pune. The set-up here in In­dia looks at the do­mes­tic needs and sup­ports the global elec­tri­fi­ca­tion pro­gramme of Cummins Inc. It’s a very sig­nif­i­cant in­vest­ment for us.

Q: How are you ad­dress­ing the hoid in the sup­plier ecosys­tem in In­dia when it comes to in­creas­ing lo­cal­i­sa­tion?

Furber: From an en­gine per­spec­tive, we moved from BS III, a non-em­mi­sionised me­chan­i­cal sys­tem to BS IV in a short pe­riod. Of the over bil­lion dol­lars in­vested in In­dia, a sig­nif­i­cant por­tion has been for tech­nol­ogy, and also for man­u­fac­tur­ing. We’ve built an elec­tron­ics fuel sys­tem ca­pa­bil­ity here in In­dia. As we move to BS VI, we are also in­vest­ing to­wards build­ing lo­calised emis­sion solutions in the af­tertreat­ment space as well. In case of elec­tri­fi­ca­tion, we are wait­ing to see man­u­fac­tur­ers start their in­vest­ments here. We are cer­tainly en­cour­aged by the ex­ist­ing sup­plier base. Our part­ners will make in­vest­ment with us at the right time so that we have a lo­cal sup­ply base. I don’t think it will work in In­dia with­out a lo­cal sup­ply base.

Q: Given the back­drop of the Cummins fourth quar­ter rev­enue in­crease by 22% over the same pe­riod a year ago, which are the growth ar­eas and chal­lenge ar­eas over a short to medium and medium to long term horizon?

Furber: Things look strong here in In­dia. In­fra­struc­ture push will help the off-high­way mar­ket. The truck mar­ket is look­ing very strong, es­pe­cially for 2018-19. Cummins has tra­di­tion­ally per­formed well in mar­kets with chang­ing tech­nol­ogy. It is a place where we thrive around the world. We see it as a good plat­form for growth. We have in­vested in In­dia not only for the do­mes­tic mar­ket but also for the rest of the world.

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