Diesel Giant Cummins Goes Electric, Invests $3.7B To Buy Electric Powertrain Maker Meritor

Diesel giant Cummins goes electric, invests $3.7B to buy electric powertrain maker Meritor 6 photos
Photo: Tesla
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Electrification is in full swing, and even diehard petrolheads begin to take notes. Cummins, one of the most important diesel engine makers, is already making strides in decarbonizing its engines. After experimenting with hydrogen, Cummins goes all-in into electric powertrains with the acquisition of Meritor, a leading producer of electric powertrain solutions for commercial vehicle and industrial markets.
Unlike other industrial giants, Cummins wants its eggs in as many baskets as possible. The diesel specialist looked into hydrogen-powered combustion engines and is now pursuing a multi-fuel engine platform that can help its partners achieve decarbonization goals.

But the ultimate step is investing in electric powertrain solutions, seeing how more and more truck makers plan to offer electric trucks. This is why buying Meritor plays right into this trend and opens a huge market of possibilities to Cummins.

Meritor is not only making electric powertrains but also transmissions, axles, and braking systems, essentially broadening Cummins’s reach into the trucking sector. It will be able to offer its clients not only the engines (or electric motors) but also the drivetrain with a one-stop solution.

Up until now, its customers had the option to buy a truck from a third-party manufacturer like Freightliner but specify a diesel engine from Cummins. From now on, the range of customization possibilities will greatly extend to other components.

This acquisition adds products to our components business that are independent of powertrain technology, and by leveraging our global footprint we expect to accelerate the growth in Meritor’s core axle and brake businesses,” said Tom Linebarger, Chairman, and CEO, Cummins. “There is also a compelling financial case for this acquisition, with significant synergies expected in SG&A, supply chain operations, and facilities optimization.”

But the true scope of this acquisition is to accelerate Cummins's New Power business, which involves the development of motors and axles for trucks that are powered by electric and hybrid powertrains. The electric truck segment is still in its infancy, but it grows at a fast pace.

Tesla Semi will soon launch on the market, and it will surely need a supplier like Cummins. And this is just the beginning. Other truck makers will follow suit, just like it happened with the passenger cars and pick-up trucks.
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Editor's note: The galley features pictures of Tesla Semi electric trucks, as well as Cummins hydrogen-powered experimental trucks and engines.

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About the author: Cristian Agatie
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After his childhood dream of becoming a "tractor operator" didn't pan out, Cristian turned to journalism, first in print and later moving to online media. His top interests are electric vehicles and new energy solutions.
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