Transition Times
I think these are really interesting times for the commercial industry, especially as we go through this phase of transition in the energy sector. Until now, we have been heavily reliant on diesel as the main source of fuel, but now we have various alternatives. At Cummins, we are very excited to be a part of this revolution. Specifically, if you talk about Cummins India, we are committed to the decarbonisation journey, and at the overall Cummins level, we have set a target of becoming carbon neutral by 2050. India is a big part of that journey. In India, we are working on various new technologies, to begin with.
Take LNG, for example. It’s a very promising, here-and-now kind of fuel technology. We already have an engine that is proven with this technology, offering performance similar to that of diesel engine. The vehicles are already on the road and performing really well. The next step is hydrogen, which we are extremely optimistic about, because we believe hydrogen is the fuel of the future.
We are in an advanced stage of developing hydrogen engines and have already set up a plant in Jamshedpur. At this facility, we won’t just be producing hydrogen engines; we will also be manufacturing other technologies, such as Type 4 hydrogen tanks for hydrogen storage.
Overall, we are striving to stay ahead of the curve when it comes to energy transition. However, we know that the next 5-10 years will be crucial for rolling out these technologies and truly commercialising them, so that customers can benefit in terms of total cost of ownership.
Tata Cummins Plans
Tata Cummins and Cummins as a whole are deeply committed to decarbonisation. Globally, we are investing significant resources in these new technologies. For instance, in hydrogen internal combustion engines, we have invested hundreds of millions of dollars in this technology.
We have already started producing these engines at our Jamshedpur plant. To support this, we are localising Type 4 hydrogen tanks and setting up the necessary production facilities at the same plant.
So, we are committed to this decarbonisation journey in India. We are aligned with the government’s policies and thought processes, and we’re working closely with our customers to ensure that we bring these technologies to life.
Sustainable Mobility Landscape
I see 2025 as a pivotal year for proving some of these technologies. For example, if you look at the LNG landscape, we are still in the process of setting up fuel stations across India. If you compare this to, say, China, they are far ahead. Their LNG penetration is already at almost 25%, whereas we are not there yet. China is also installing around 700 new fuel stations every year.
This is where we need to catch up in terms of speed to ensure that LNG becomes a viable low-carbon technology for commercial vehicle mobility.
As for hydrogen, it is well-aligned with the government’s vision for energy independence and the leap toward the future. As mentioned, we are working on hydrogen internal combustion engines, which are already being produced at our plant in Jamshedpur. We are also developing hydrogen storage systems to support these engines.
Overall, with the help of various government initiatives, I believe these technologies will be proven by 2025. We will slowly transition to these new technologies, but I personally feel that it might take a bit longer compared to what some other countries have experienced.
Addressing Challenges
If you look at the commercial vehicle industry, particularly the heavy and medium segments, economics are a key factor for customers. These are assets that customers want to sweat, meaning they want to maximise their use. It is like the airline industry, where airlines need their planes in the air as much as possible to make money.
For these technologies to be adopted, they need to offer a significant advantage to customers in terms of total cost of ownership. For example, when it comes to the parity between diesel and LNG fuel, there needs to be a significant gap to make the transition attractive. Right now, that gap is only about 10%, which is not enough. We will need to work continuously to widen this gap and make LNG more affordable, which in turn will encourage more entrepreneurs to set up dispensing stations.
The main challenge with the adoption of green hydrogen in commercial vehicles is that the technology still needs to be proven on a commercial scale, which is happening right now. The second big challenge is distribution — specifically, ensuring that hydrogen is readily available across major freight corridors.
Union Budget 2025
My expectation from the Union Budget 2025 is that it will enable faster implementation of these new technologies. The budget could provide crucial support for businesses to continue investing in these technologies. For mass adoption to happen, these technologies need to be affordable, and that’s where the budget can play a key role in helping us move toward the commercial and mass-scale adoption of these technologies.
