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Cummins (CMI) Secures $75M Grant to Transform Indiana Facility
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Cummins Inc. (CMI - Free Report) has secured a $75 million grant from the Department of Energy to transform around 360,000 square feet of its Columbus Engine Plant (CEP) in Indiana into a facility for zero-emissions components and electric powertrain systems. This grant, the largest ever awarded solely to Cummins, is part of the funding from the Inflation Reduction Act.
CMI will match the grant, investing an additional $75 million, making a total of $150 million to transform the space and increase production of battery packs, powertrain systems and other battery-electric vehicle (BEV) components for Accelera by Cummins, its zero-emissions division. This expansion is expected to create approximately 250 full-time jobs, with opportunities for the existing employees to transition into these new roles over time.
Per Amy Davis, president of Accelera by Cummins, the DOE grant is a significant milestone in the company's journey toward a zero-emissions future and enhancing battery production in the United States, thereby bolstering its global leadership in electrified solutions for commercial markets.
Upon project completion, CEP will employ around 350 people dedicated to BEV-related work. Around half of the 1.42 million-square-foot facility, operational since 1926, will be allocated to zero-emissions manufacturing. The electric powertrains produced at CEP are projected to cut approximately 104 million metric tons of carbon dioxide emissions by 2030.
Cummins, with its Destination Zero strategy, is dedicated to assisting customers in transitioning smoothly to a zero-emissions future. Recognizing the need for diverse solutions, the company uniquely caters to customers' varying needs by offering fuel-agnostic engine platforms that run on advanced diesel, natural gas and alternative fuels, as well as fully electric and hydrogen fuel cell solutions. CMI remains committed to advancing all these solutions.
The escalating R&D and engineering expenses on the Accelera segment are hurting the company’s margins. The segment incurred an operating loss of $223 million in 2021, $334 million in 2022 and $443 million in 2023. Cummins expects the segment’s operating loss in the range of $400-$430 million in 2024.
Having said that, Accelera is well-positioned to enhance the company’s financial performance as it scales up. Cummins expects Accelera’s business to achieve break-even by 2027 thanks to its extensive portfolio of technologies, expertise in global industrial markets and strong relationships with OEMs and end customers.
Utilization of its multi-solution approach, which leverages innovations and product portfolios from both its core business and Accelera, positions Cummins to spearhead the transition to zero emissions and surpass market growth.
The consensus estimate for SZKMY’s 2025 earnings suggests year-over-year growth of 2.09%. EPS estimates for 2025 and 2026 have improved 38 cents and 15 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for HMC’s 2025 sales and earnings suggests year-over-year growth of 0.73%. EPS estimates for 2025 have improved 9 cents in the past 60 days.
The Zacks Consensus Estimate for AXL’s 2024 sales and earnings suggests year-over-year growth of 3.05% and 544.44%, respectively. EPS estimates for 2024 have moved up 2 cents in the past 60 days. The same for 2025 has moved up 5 cents in the past 30 days.
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Cummins (CMI) Secures $75M Grant to Transform Indiana Facility
Cummins Inc. (CMI - Free Report) has secured a $75 million grant from the Department of Energy to transform around 360,000 square feet of its Columbus Engine Plant (CEP) in Indiana into a facility for zero-emissions components and electric powertrain systems. This grant, the largest ever awarded solely to Cummins, is part of the funding from the Inflation Reduction Act.
CMI will match the grant, investing an additional $75 million, making a total of $150 million to transform the space and increase production of battery packs, powertrain systems and other battery-electric vehicle (BEV) components for Accelera by Cummins, its zero-emissions division. This expansion is expected to create approximately 250 full-time jobs, with opportunities for the existing employees to transition into these new roles over time.
Per Amy Davis, president of Accelera by Cummins, the DOE grant is a significant milestone in the company's journey toward a zero-emissions future and enhancing battery production in the United States, thereby bolstering its global leadership in electrified solutions for commercial markets.
Upon project completion, CEP will employ around 350 people dedicated to BEV-related work. Around half of the 1.42 million-square-foot facility, operational since 1926, will be allocated to zero-emissions manufacturing. The electric powertrains produced at CEP are projected to cut approximately 104 million metric tons of carbon dioxide emissions by 2030.
Cummins, with its Destination Zero strategy, is dedicated to assisting customers in transitioning smoothly to a zero-emissions future. Recognizing the need for diverse solutions, the company uniquely caters to customers' varying needs by offering fuel-agnostic engine platforms that run on advanced diesel, natural gas and alternative fuels, as well as fully electric and hydrogen fuel cell solutions. CMI remains committed to advancing all these solutions.
The escalating R&D and engineering expenses on the Accelera segment are hurting the company’s margins. The segment incurred an operating loss of $223 million in 2021, $334 million in 2022 and $443 million in 2023. Cummins expects the segment’s operating loss in the range of $400-$430 million in 2024.
Having said that, Accelera is well-positioned to enhance the company’s financial performance as it scales up. Cummins expects Accelera’s business to achieve break-even by 2027 thanks to its extensive portfolio of technologies, expertise in global industrial markets and strong relationships with OEMs and end customers.
Utilization of its multi-solution approach, which leverages innovations and product portfolios from both its core business and Accelera, positions Cummins to spearhead the transition to zero emissions and surpass market growth.
Zacks Rank & Key Picks
CMI currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Suzuki Motor Corporation (SZKMY - Free Report) , Honda Motor Co., Ltd. (HMC - Free Report) and American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for SZKMY’s 2025 earnings suggests year-over-year growth of 2.09%. EPS estimates for 2025 and 2026 have improved 38 cents and 15 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for HMC’s 2025 sales and earnings suggests year-over-year growth of 0.73%. EPS estimates for 2025 have improved 9 cents in the past 60 days.
The Zacks Consensus Estimate for AXL’s 2024 sales and earnings suggests year-over-year growth of 3.05% and 544.44%, respectively. EPS estimates for 2024 have moved up 2 cents in the past 60 days. The same for 2025 has moved up 5 cents in the past 30 days.