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.
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.