Cummins is a power technology company, listed in the US, specializing in diesel engines, underlying components, exhaust-gas after-treatment, diesel power generation and pivoting towards hydrogen. We reviewed 80 patents from 2023-24. What outlook for Cummins technology and verticals in the energy transition?
Our recent research suggests power grid bottlenecks, while the rise of AI will also increase the market for diesel gen-sets from 3GW pa to 7 GW pa.
Hence we have been exploring companies in medium-scale commercial and industrial power generation, such as Generac.
Cummins was founded in 1919, headquartered in Indiana, with 75,500 employees and is listed on NYSE with c$40bn of market cap in 2024.
Cummins has filed c5,000 patents historically. We reviewed 80 of the most recent patents filed in 2023-24. Most are clear, articulate specific issues that need to be addressed, including lower-cost or easier manufacturing, then describe specific components and solutions alongside detailed engineering diagrams.
The breakdown of Cummins’s business, by revenue, EBITDA and patent filing focus surprised us, with lower exposure to power generation and a growing focus upon hydrogen.
Based on patent filings, it may even seem as though power generation is being de-prioritized, while hydrogen is being heavily re-prioritized and comprised c15% of recent patents in 2023-24 (chart below).
However the largest focus area remains its core business of diesel engines and exhaust-gas after-treatment (to remove NOx). Our long-term oil demand outlook does see growing demand in this end market.
Exhaust from a diesel engine contains NOx and particulates. An after-treatment unit typically reduces NOx into N2 and H2O using a 30-35% solution of urea in 65-70% deionized water. Heated urea decomposes: CO(NH2)2 + H2O -> 2NH3 + CO2. NH3 then reacts with NO: 4NH3 + 4NO + O2 -> 4N2 + 6H2O. The urea solution is marketed under brands such as AdBlue from BASF. Cummins is among the largest vendors of after-treatment systems in the world, worth >$5bn pa in sales.
However, this business is casting off the shadow of a $1.7bn Clean Air Act fine in 2023, for installing defeat devices. Yet we did find clear, specific and detailed patents improving after-treatment systems.
Another large component of the patents focuses upon diesel engines, improving the fuel economy and resiliency of engines, valves, pistons, cylinders and other components. Details are in the data-file.
This data-file contains our conclusions into Cummins’s diesel engine and generator technology, a broader outlook for some of the company’s verticals, and some undiplomatic comments which we should probably have left out.