In early February, the world's largest independent engine manufacturer released its 2021 financial report, with annual sales of $24 billion, achieving the best performance in history. At the same time, Cummins China also delivered $7.4 billion in sales revenue, which also set a record high.
However, compared with the beautiful financial report, Cummins' acquisition of two giants in the commercial vehicle field, Meichi and Gekebo, has become the focus of market attention.
What can MZS and Cocobo bring to Cummins?
Whether it's an internal combustion engine vehicle or an electric vehicle, powertrain solutions have always been the core technology. Märcher is a leader in this field, and in particular its electric transaxles (eAxles) will be a key integration point for hybrid and electric drivetrains.
For commercial vehicles with greater demand for energy saving and emission reduction, Märcher's electric transaxles are one of the indispensable core components. With the acquisition of Meichi, it means that Cummins has a lot of say in the new energy development process of global commercial vehicles.
As for Gekebo, it is the world's leading engine brake and cylinder stopping technology company. Through the acquisition of KÖCOBO, Cummins' diesel engine products can make great progress and progress in terms of performance and energy saving and emission reduction.
With the increasingly stringent emission regulations, especially when pure electric technology is difficult to fully replace the traditional internal combustion engine in the short term, the engine braking and cylinder stopping technology of The Company is also of great strategic importance to Cummins.
So in general, from the perspective of Cummins' two acquisitions, the equal emphasis on new energy and traditional energy is the biggest bright spot.
By reinforcing itself, Cummins has further consolidated its leading position in the global engine field, while also reserving sufficient technical capabilities for the accelerating new energy era.
In addition to the two important acquisitions, Cummins also attaches great importance to achieving energy conservation and emission reduction goals through self-research of core technologies. The most important of these is the upgrade of the existing powertrain platform.
The upgraded powertrain platform not only has a high degree of versatility, but also realizes the universality of cylinder blocks and other core components, and can also realize the universal use of different fuels including diesel, natural gas, and hydrogen.
The purpose of this will be to greatly reduce the complexity of Cummins' internal products and the corresponding management costs, and at the same time, it will also allow customers to purchase related products at a better cost-effective price, and ultimately bring about the achievement of energy conservation and emission reduction goals in the whole society.
Layout fuel cell is expected to grasp the development direction of the times
As mentioned above, commercial vehicles have a great demand for energy conservation and emission reduction. Looking at the current global commercial vehicle market, the situation of pure electric and fuel cell two-wheel drive has been completed.
Starting from the actual application scenarios, the consensus in the industry is that for heavy trucks, the route they drive every day is relatively fixed, and the mileage will not be too long, so pure electric, especially pure electric technology that can be changed points, is a good choice.
As for fuel cells, they can effectively compensate for the lack of battery energy density, and the recharge time is no different from traditional diesel, so it can become the first choice for trucks that travel more than 300 miles at a time.
As early as 2018, Cummins established the New Power New Energy Power Division, which involves technologies such as electric power, fuel cell power systems, and hydrogen energy.
In order to enhance Cummins' own competitiveness in the field of new energy in the shortest possible time, it has successively acquired fuel cell and hydrogen fuel developer Hydrogens, invested in Sion Power to develop lithium metal batteries, and completed the layout of fuel cells and lithium batteries.
In 2021, Cummins and Sinopec Capital jointly initiated the establishment of Cummins Enze (Guangdong) Hydrogen Energy Technology Co., Ltd., which focuses on investing in the production of electrolyzed water hydrogen production equipment and making green hydrogen an "affordable and accessible" energy source.
In addition, Cummins has also set up a dual headquarters in China, Cummins Hydrogen China Headquarters and Hydrogen Energy China R&D Center Headquarters.
After completion, the Hydrogen Energy China headquarters will cover the PYC manufacturing center and the fuel cell engine and its core components manufacturing center, providing technical support for Cummins to deploy fuel cell technology in the domestic market.
What's next for Cummins?
In the field of fuel cells, taking Toyota as an example, through Yihuatong and local technology companies such as Reshaping, it has connected a number of mainstream commercial vehicle companies in China, including FAW, Dongfeng, GAC, Beiqi Foton, Jinlong and so on.
Introduce Toyota's key core technology of fuel cells and form your own circle of friends to expand your voice in the domestic fuel cell market.
For Cummins, Toyota's approach is worth learning. In the domestic automotive market, Cummins has closer ties with traditional commercial vehicle companies.
In addition, Cummins also needs to think more about the layout of the business model. In the era of the new four modernizations of automobiles, the breakthrough of the underlying core technology and the layout of the business model are equally important.
Taking Weilai as an example, the blessing of its vehicle-to-electricity separation system and power exchange technology has bred a very large commercial value for Weilai's power exchange model itself.
With the passage of time, especially the increasing number of OWNERS of NIO, it is not difficult for NIO Power to be listed separately on the securities market.
Therefore, when Cummins lays out the core technologies including fuel cells and pure electric, it can give more consideration to how to start from the pain points of customer use and seek the deployment of better business models, so as to bring greater impetus to the commercialization of its core technologies.
As a giant in the era of the internal combustion engine, Cummins has long realized the importance of new energy transformation. The acquisition layout is a shortcut to quickly build core capabilities.
However, in the era of new energy vehicles, more and more vehicle companies have realized the irreplaceable role of self-developed three-electric system. In this case, Cummins also needs to always be half a step faster than the vehicle company in technology in order to give the main engine factory a reason that cannot refuse.
And for the foreseeable future, through acquisitions and self-development, Cummins' development will be more sustainable.