Hyundai Motor Co. (OTC: HYMTF) and Cummins Inc. (NYSE: CMI) will work together on ways to develop and commercialize electric and fuel cell powertrains for North American commercial vehicle makers and to make stationary backup power systems for data centers.
With a memorandum of understanding signed on September 26, South Korea's Hyundai becomes Cummins' latest partner in hydrogen fuel cell development.
Fuel cell expansion
Earlier this month, Columbus, Indiana-based Cummins closed a $290 million acquisition of Hydrogenics, a Canadian fuel cell maker. It also invested an undisclosed amount in Loop Energy, another Canadian fuel startup.
"For Cummins, this partnership gives them another pathway to use the electric motors, power electronics and transmission technology they have developed for electric powertrains," said Sam, principal analyst at Navigant Research. "All you're doing is swapping out the source of electricity."
Abuelsamid also said, "Hyundai's got the expertise in fuel cells. Bringing those two together is very complementary."
Cummins is best known as a supplier of medium- and heavy-duty diesel engines to major truck makers.The company formed an electrified power business segment in 2018. So far, Cummins has introduced seven complete electrified powertrain applications in six global markets.
The company has made significant investments over the past year to accelerate its fuel cell capabilities, said Thad Ewald, Cummins vice president of Corporate Strategy.
"Cummins is reinventing itself, just like Daimler is doing," Antti Lindstrom, a trucking industry analyst with IHS Markit, told FreightWaves. "Both were completely committed to diesel technology until somewhat recently,"
Hyundai Motor opened the world's first commercial production facility for fuel cell vehicles in 2013. The Tucson Fuel Cell small sport-utility vehicle was the first commercially available hydrogen-powered vehicle when it went on sale in 2015. Hyundai's second-generation NEXO fuel cell electric SUV can travel 610 kilometers (379 miles).
Hyundai fuel cell systems are comprised of fuel cell stacks that convert stored hydrogen into electricity, as well as sub-components for heat management and air supply among other processes for power generation. Fuel cells emit only clean water vapor.
The new powertrains would combine Hyundai's fuel cell systems with Cummins' electric powertrain, battery and control technologies.
Working with Cummins gives Hyundai greater access to the North American commercial vehicle market, Abuelsamid said.
"Collaborations such as this will enable us to further diversify our business, as well as reinforce our global hydrogen leadership through sales of new and existing Hyundai fuel cell systems," said Saehoon Kim, vice president and head of Fuel Cell Group at Hyundai Motor Group.
Benefit to Nikola
The latest move advancing fuel cells in trucking also benefits Nikola Motor, a startup planning to deliver hydrogen-powered fuel cell electric Class 8 trucks to North American and European customers in the fourth quarter of 2022. Nikola has about 14,000 orders on hand.
"It makes Nikola's case stronger because the crowds are growing around them," Lindstrom said. "The world is turning more and more in that direction."
And it makes the size of the fuel cell pie bigger.
"This helps legitimize the idea that (Nikola's) approach is probably the better answer," Abuelsamid said. "Even if companies opt for Cummins or Hyundai, it expands that population and starts to resolve the chicken-and-egg issue. As the total addressable market of fuel cell vehicles grows, infrastructure providers are going to step up.
The Cummins-Hyundai partnership comes as demand for fuel cell technology is growing. Hydrogen can be produced from renewable sources, stored economically and deployed for transportation and stationery needs.
"That's probably a smart target market for them," Lindstrom said. "These industries that are very sensitive to power outages, so they need to make sure they have constant availability of power. The financial opportunities would seem better here than in residential use."
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