I hope everyone has had the opportunity to explore our virtual environment this morning, which includes several interviews with our partners in the hydrogen space and our Ask an Expert Corner. Before we move into Q and A, a reminder that some of the information that you will hear today consists of forward looking statements within the meaning of the Securities Exchange Act of 1934. Our actual future results could differ materially from those projected in such forward looking statements because of a number of risks and uncertainties. More information regarding risks and uncertainties is available in our filings with the Securities and Exchange Commission.
With that out of the way, I can go ahead and introduce our panel for today. We have with us today our Chairman and CEO, Tom Limebarger our CFO, Mark Smith the President of our New Power business, Amy Davis our Vice President of Strategy, Thad Ewald and Vice President of Fuel Cell and Hydrogen Technologies, Amy Adams. Welcome, everybody. So let's get started here, jump right into Q and A. Tom, one of the areas we've received a lot of questions on so far is how important we feel government support will be to drive adoption of green hydrogen production and fuel cells.
Thanks, James. And let me just add my welcome to everybody. Thank you so much for joining us today. And you started with an important one, James. There's no question that government support for hydrogen will be key to the speed of adoption.
In order to support adoption, government should, I think, focus on three areas. First, of course, is infrastructure. It's an infrastructure industry, energy and transportation infrastructure will be important. Development of the technology and then, of course, deployment. And in the infrastructure area, we need, to ensure that our systems can support the broad deployment of hydrogen.
That means, of course, that government has to invest in infrastructure, both directly and also through incentives indirectly, Even using government convening power to bring infrastructure players together on a schedule to ensure infrastructure is created, there's a lot of work to do there. It's a really important area, and we'll definitely need government. On the development area, policy should support both industry and government research into the technology. There's a lot of work to do left to do on the technology, especially with regard to driving down cost and improving efficiency in order for it to compete with existing technologies. And then on deployment, anything that encourages, both through incentive and direct funding, deployment of the industry and hydrogen across various industry sectors will help speed the deployment across, all sectors.
Because as each sector builds out, it makes cost better for every other sector, so deployment will be really important. I can't leave this question, though, without talking about the cost of carbon. There is no question for technologies like hydrogen and fuel cells to compete on a level playing field with existing technologies. There will need to be a cost placed on carbon. So governments will have to play a role figuring out how they wanna do that to make sure that the costs associated with carbon are internalized into the technologies deployed.
Great. Thank you, Tom. And a follow-up to that that we're getting. So as we look at the COVID situation we find ourselves in today, what role do you think the transition to hydrogen can play in spurring some economic and job growth, given that fact?
James, this is a question I've been thinking about for some time. It's an interesting one because it fits our mission as a company. I do think that if any any close look at how our economic and political situation looks in The US says that we need to do more to include more people in our economy and and the benefits of our capitalist system. Too many people are being left behind. So I think whatever solutions we put in, they need to be more inclusive.
And then the second point is we need to make sure that as we do economic growth, we also create sustainability for our planet. Because, of course, economic well-being and prosperity are both, economic in terms of salaries and incomes and opportunities to purchase things, but they're also clean air, clean water. So we we need to figure out a way to do both. And, really, this is what the mission of Cummins is all about, is trying to figure out how to build a more prosperous world. And prosperous for us means more economic growth, but also doing more with less, having less impact on the planet.
So what I think the opportunity here is we are going to make a number of investments in infrastructure. We're gonna put in, policies to stimulate the economy. Why not use those dollars to drive things that we will solve some of these problems in the future? Investments in green green power, new energy, fuel cell, and hydrogen, this will allow us to bring not only to stimulate jobs and economy, but make sure that we're doing it in a way that's sustainable for the planet. So I I think if I was sitting there figuring out how I was gonna spend my infrastructure money, it would be thinking about how I bring more people into the economy and how I invest in the future so that we have cleaner power, more sustainable technology in the future.
And I think hydrogen can play a significant role in that.
Great. Thanks, Tom. Appreciate that answer. Secondary of interest, maybe this one is a good question for Amy Davis. So in order to gain more confidence that this hydrogen technology is viable and Cummins is in a good position, what kind of milestones are you looking for going forward?
Thanks, James. Great to see everybody. There's really three deliberate areas that we're looking at setting milestones for. One is technology, the other is commercial and then also in the production area. So looking forward, we have a lot of exciting pilots ahead.
We love pilots because pilots give us the opportunity to test specific technology boundaries but also forge commercial relationships. So for example, if you think about our Alstom relationship, really that began with a pilot train in Austria, and now we have over 100 systems that we'll be selling by 2025. So looking ahead, we have five DOE projects that I'm particularly focused on, just to name a couple. Two of those are in the solid oxide space, one in electrolyzer and one in fuel cells. So that will give us some really key technical learning.
We also have one that we just announced last week with Navistar and Warner Trucks, where we'll be testing specific things around range but also efficiency, and it's a great opportunity to be running trucks in The U. S. Also in the production space, we just announced that we'll be breaking ground in Germany for our production site, and that will be a key site for gaining efficiency in our supply chain for Alstom and other customers in Europe. And in the electrolyzer space, we have a couple of key commissioning projects that will be happening in the future. One in Becancour, Canada, which is the largest PEM 20 megawatt hydrogen producing site in the world.
And then we have one in Douglas County, Washington in The U. S, which we'll be commissioning. And we'll be watching those closely because I think that will be just some key commercial wins given our pipeline that we see in electrolyzers in 2021.
Great. Thank you, Amy. So the next question here, more of a financial focus, and this one probably well set for Mark. So the question is, how does this focus on hydrogen impact the EBITDA losses in your New business? And when will New Power breakeven?
Thanks, James, and good morning, everyone. Well, first of all, there'll be no change to our our projections for this year. We're expecting an EBITDA loss for the full New Power business in the range of a 160,000,000 to a $170,000,000. Next year could run closer to around a $200,000,000 EBITDA loss, but overall, we're expecting the losses over the three year period 2020 through 2022 to run around that $500,000,000 that we discussed at our last Analyst Day. And to put that in context, this represents less than 10% of our, current operating cash flow, and we think that's a good an important investment, in our future.
And, again, given our financial strength, our liquidity, our current cash flow of our base business, we think we can do all that work without constraining the investment in our core business, and we're still able to return capital back to shareholders. The timing of breakeven, we're all interested in that. That's primarily going to be driven by the pace of, the technology adoption. We certainly expect electrolyzers to be gross margin positive, which will help those financials. But it's also possible that the engineering spend could go up if market adoption accelerates from here.
Great. Thanks, Mark. And a follow-up to that, what are your thoughts on the level of capital expenditures that the company is planning in the new power business to support revenue growth in this space?
Okay. Yep. So we do not see the new power business as a huge, consumer of capital within the overall Cummins portfolio. This year, we'll spend around $25,000,000 We anticipate a modest increase next year, but overall, the capital bills for new power should be manageable within the framework we've given for Cummins total spend in the three to 4% sales range. Quite frankly, the nearer term, the engineering spend is the largest commitment as it is in our core business.
Of course, as I've already said, we have the financial strength to both fund that engineering and the capital expenditures. And again, we've been investing successfully globally for a hundred and one years. So we've got a lot of existing infrastructure, network, relationships that we can rely on that mean the incremental investments, are very manageable in the context of the overall company's financial position.
Great. Thank you, Mark. So the next question here is around end market growth. So maybe Amy Davis, this is one you could maybe cover for us here. And the question is, which end markets and regions do you expect to see initial adoption specifically of fuel cells in?
Yes. Thanks, James. Fuel cell adoption, I think, is really going to be driven by a couple of things. I talked about it a little bit in our prepared remarks: infrastructure, availability of hydrogen, costs, and probably also government incentives. Combinations have really led trains to be early adopters.
And I talked about this, but really the cost of electrifying train lines is comparable to fuel cells. Actually the cost makes sense in that market and you have fueling that can happen at base. So it's a market that we see adoption happening, and by 02/1930, probably 10% of where there's diesel today, you'll see fuel cells. Another market that we see similar in 2030 to that 10% share is actually buses. While buses have been early adopters in BEV, there's a lot of routes and other things that need a bigger range, and so they'll be looking for fuel cells.
So I think that'll be around 10% in 2030 as well. Something like heavy duty trucks, which a lot of people talk about, we really don't see, and I think even the Hydrogen Council talks about around 2.5 of heavy trucks in 2030 having fuel cells. So a much longer adoption rate largely driven by just the huge diversity in duty cycles and applications in heavy truck and the infrastructure needs there. There's still a lot of other segments that are interesting and we'll be adopting at that sort of long rate, but you're going to see in marine and in aerospace as well as stationary power actually are going to be adopting over this longer period. And we have installations in all those applications actually today.
And I'd probably just add one more thing about the region. So I think the real driver in some of the regions is going to be the government incentives. Tom talked a little bit about that. And so in Europe and China and even Korea, we see a lot of aggressive government announcements that could lead to adoption rates increasing there.
Great. Thanks, Amy. So the next question for Tom. What excites you most about Cummins opportunity in hydrogen technologies? Are there any things you can think of that may delay adoption?
James, let me first say what I'm excited about for the world with hydrogen. Hydrogen provides a solution to this fundamental challenge we have as a as a as a tire globe. We we've gotta reduce the use of carbon in our energy, and that means we need to use more renewables. But we know renewable energy, comes when it comes, and it's and we need it when we need it, and they don't always match up. So the solution to that problem to make the energy dispatchable when you need it is storage.
And hydrogen provides a pathway to store energy from renewables and then be able to be used again as electricity or as as fuel or as industrial gas. So it's a very flexible, movable, energy dense storage material that can solve a number of energy problems at at at global scale. So it's it's a fundamental building block to a low carbon world. That's exciting, I think, for all of us. And I think the size of the opportunity for Cummins is also substantial.
It's difficult to quantify today for sure, and there's a lot of work left to do, but we know it's big. I mean, we know that it's a fossil fuel for power sorry. It places fossil fuels for power in the transportation sector, but it also does heat. It does industrial industrial processes. Processes.
It It does does storage, as we said. So it it has a broader scope than diesel and other fuels that we've been dealing with. And we think a lot of these technologies, transportation, energy, will move to hydrogen and fuel cells over time. So that's why we've we believe this is a very substantial opportunity for the planet and for Cummins. And for Cummins, it represents not only new technology to do the things we already do, but it's also potential growth for the company.
We can now begin to produce hydrogen through electrolyzers. We can enter new markets that we aren't in today and expand our position in some of the markets we are in, like rail and marine. But most of all, what I'm excited about is this is the pathway by which we can fulfill our mission statement about making people's lives better by powering a more prosperous world. I mentioned that for us, prosperous means we keep driving economic growth. People still get more jobs.
They have more income. They have they they can still accomplish things they need to accomplish to build their families, but we can do it in a more sustainable way that keeps our air and our water clean for our children and our grandchildren. That's the things we need to invest in the future. So for us, this is an exciting pathway for the company too. And in terms of what might slow down adoption, I talked about this in your first question, we need infrastructure.
No question about it. And that means we need government to play a role. A lot of private sector players want to play a role here. But we need government to convene those players, to provide some incentives, to make sure that that that infrastructure can be built where it needs to be built. So there is a role for government to play.
And I think this cost of carbon issue will will be there until we address it. We we need to find a way to internalize the externality, which is carbon and climate change. And and so policies from governments will be necessary. Those are the things I think that are that need to be addressed to move the industry along, but there are a lot of major companies, financial institutions that are ready to invest when these conditions are right.
Great. Thanks, Tom. Next question related to solid oxide technology. So this one probably well positioned with THAAD. The question is what has to happen to make solid oxide fuel cell technology ready for commercialization?
When do you expect this will happen? And do you have any commercial projects lined up already?
Great. Thank you, James, and good morning, everybody. Me James, if you're okay, why don't I just step back and talk a little bit about solid oxide and what it's used for? We've talked a lot. Mean, there's a lot of focus on the transportation sector and that sector.
And really, we see solid oxide more in the sort of the stationary sector, so more for prime power applications. And solid oxide also, as Amy mentioned earlier, we won DOE grant to actually work on solid oxide electrolysis as well, so both for hydrogen generation as well as stationary power. And just in its its simplest form, it's a it's a same kind of process for a fuel cell, but I think probably some key differences is runs at a much higher temperature than PEM fuel cells. And so it actually lends itself to, you know, combined cycle kinds of operations, which is what you ought to drive efficiencies up, which is what you find in stationary applications. And also as as opposed to PEM, you can actually reform very efficiently onboard.
So you take natural gas straight into hydrogen, or you can bring hydrogen directly into it as well into the solid oxide fuel cell. So that's just a brief primer on the the technology.
I would urge everybody to go
to the Genius Bar if you've got questions and ask more about that. But, look, if I just go to the second part of your question, which was, if you remind me, was kinda commercialization and what do we see? Is that what it was? Yeah. Yeah.
The question was the you know, there's some the technology is still pretty new. We feel pretty good about the technology that we have. It fundamentally has some advantages, we believe, of other things that are currently in this nascent market, although all of this stuff is even though it's been worked on for a long time, is quite new. Effectively, we can use we use steel as a for our plate rather than growing ceramic plates. We have a higher efficiency process.
So we have some process technology here. It gives us better process efficiencies and therefore lower costs over time. As well as because of the process we use, we have a larger surface area than the competition. So we feel very good about the technology. And it's on its way to finding some in the fuel cell side, so actually producing power.
We expect to have some initial projects out there in the market and demonstrator projects with people in the next twelve to twenty four months for solid oxide for the fuel cell side. And, of course, the electrolyzer side, that's the DOE project that we're getting started on. So we feel very good about that. And I think as solid oxide continues to it'll find its place in the stationary world, and we feel very well positioned with the technology that we have. Was that the awesome set of the questions there?
I think that I got it all?
I think so. Yes, very good. Excellent. So the next question for Amy Adams related to electrolyzers. So throughout the prepared remarks, you mentioned that currently, Penn Electrolis is selling for about $1,000,000 per megawatt.
How do you expect to see the cost of electrolyzers come down over time, Amy?
Thanks, James, and thanks to everyone for joining this morning. I think there are a number of factors that will drive the cost down. One of the ones we mentioned before is increased system size. So we see the projects getting larger and larger, and there's some efficiencies to be gained from that. We talked about 100 megawatt projects, even up to gigawatt scale projects.
And then we see a lot of opportunity in the supply chains. So first of all, large scale manufacturing with automation, a more mature supply chain, which means the cost of the components and the materials are expected to come down. And then we're still continuing to see technological improvements, for example, increased stack power density. I think most people feel PEM as a less mature technology. If you take everything into consideration, it generally has more margin for cost reduction over time.
If there's different views out there, but the IEA, for example, says that alkaline might come down 2% annually, PEM around 5%. I think the Hydrogen Council has some slightly more bullish numbers where PEM, could come down 13% annually. But all of those numbers are kind of aligned with what we've seen for renewables, for example, in wind and solar over the past decade. So we're confident we can see those costs come down.
Great. Thanks, Amy. Next question related to returns. Maybe Amy Davis, you could comment on this one. The question specifically is, are you confident that the returns in the new power segment can be equal or better than those in internal combustion technologies for Cummins?
Yeah. Thanks, James. Obviously, these are pretty immature markets, but there are some fundamentals that make me optimistic. The first thing I would say is that these technologies are complex, which leaves a lot of room for differentiation. So I think there's going to be technical differentiation.
It could be a narrative of fuel economy, durability, those kind of things that we're very familiar with having worked with these customers in many of these segments already. So that's one. I think building on that, our technology baseline that we're starting from and our expertise here, I think makes us a good candidate to be the differentiator with these technologies, whether it's in the base system or in the supporting balance of plant. I also am encouraged by our portfolio, so I don't know of anybody who has a broader portfolio. We have battery electric vehicle components today as well as batteries, fuel cell technology, and then we just talked about electrolyzer and solid oxide.
So that entire portfolio not only will help us differentiate in the transportation segment, but also will give us new opportunities. And I think Tom talked about this in profit pools, we don't really have access to today. So I think that's pretty exciting. In some of our traditional markets, our product support is actually a big deal. I think it's really going to help differentiate us with customers where we have deep relationships and we're giving them support today.
And so if you got into some of the testimonials with some of the customers, they talk about the long relationship with Cummins as being a kind of consultant partner with them in their duty cycles and other things. And that and our service is going to be, I think, a big deal in helping us win. So overall, I'm really encouraged by the opportunity for good long term returns.
Great. Thanks, Amy. Tom, a question here about partnerships. So the question is, it appears that OEMs are more willing than ever to outsource ICE manufacturing, which is good news for the next ten years or more. But what's the case for them also outsourcing some of these new power technologies?
Yes. We are, of course, very excited about the opportunity to work with our partners on diesel engines, hybrid diesel engines, and other parts of our core business. We think that's a significant opportunity. And of course, as we invest in those technologies, we are bringing back down their both criteria pollutants and, their global warming impact. So significant improvements are also being made in those technologies, and so we're excited about those equally.
But I want to say that for in the new power technologies, hydrogen fuel cells, we we are going to have to compete with those customers just as we do today. Those customers today make a lot of their own diesel engines and a lot of their their own components, and yet we still participate actively in the industry. And in fact, we're the largest producer of engines in industry. And the reason we do that is because we invest in the technology, lead in the technology, and partner with those customers in ways that help them succeed. So if they make an engine, we provide components, and they do the system.
And where they don't make an engine, we provide the engine. We believe the future will be much the same. For us to lead in fuel cells, we will need to have the best technology. And we will provide systems, we will provide components, and we will help our customers succeed in whatever technologies they need to win, both traditional and new. And to do that, of course, we have to invest.
That's why you're hearing so much about how we're investing. We believe that to be a relevant player in fuel cells and transportation, for example, we are going to have to lead in that technology, and that's going to take a sustained investment in development of the technology. So we have been investing for a number of years now and will be investing for a number of more years as this transition takes place to make sure that we can be a leading provider. And as you heard, we are already in the market. We are we are providing fuel cells for trains.
So we will have thousands and thousands of hours on train applications before a single truck maker decides to do production, you know, large scale production of of production. We will already have experience, already have systems out there deployed for a decade before the trucks start running. What's more, in electrolyzers, the demand is now. So we'll be producing technologies related to fuel cells through electrolyzers for, again, more than a decade before the first, you know, large scale production of trucks occurs. So we will be investing in these technologies.
We'll have experience in them. We'll have systems out there. We'll have we'll be on our fourth or fifth iteration of production technology before trucks are in there first. And I think that's going to provide us with some advantage and allow our customers that use our product to get ahead of their competitors. And that's why I think we'll have a role to play.
In addition, we have a global footprint, a service network that's going to help a lot of early adopters get started. It's hard when you're rolling out buses or trains or other things for the first time to be able to service and support these products, and we can provide support across the globe on this. And just to give you a sense of the importance of a global footprint, we just signed our letter of intent with Sinopec in China to be able to work together on electrolysis. This is a significant opportunity for both companies. Today, Sinopec produces over 10% of the hydrogen produced in all of China for their refining operations.
So this is a big hydrogen producer. So by using electrolysis, to produce that hydrogen, they can save significant carbon, impact. And and, of course, the government of China is interested in that, so is Sinopec. So we're gonna work with them to help them figure out a way to decarbonize this hydrogen. That's a big opportunity for the country, big opportunity for them, and for us to deploy our technology in China.
And and China has made a major commitment to hydrogen beyond just the refining industry. They have laid out very aggressive plans to deploy hydrogen across a number of industries, including transportation. So we would, of course, like to get a footprint in China and be able to deploy the technology there as another way to scale up the technology, bring down the cost, improve the quality and then begin to help our globe get to a low carbon future.
Great. Thanks, Tom. Talking about revenue and opportunities into the future, the next question here for Frahmie Davis is related to that. Specifically, what are the assumptions behind the $400,000,000 electrolyzer revenue projection for 2025?
Sure. That's pretty straightforward. We assumed a market size in 2025 of 3.5 gigawatts. That's pretty consistent with what the Hydrogen Council would say. And we assumed a market share of 15% of those sales, that's one-five percent, and we assumed a cost for those electrolyzers of $750,000 in 2025, 750,000 per megawatt.
Now I know Amy earlier said that it's running right now about $1,000,000 per megawatt. So we are expecting costs to come down about 5% a year to get to that $750,000 per megawatt cost.
Great. Thanks, Amy. The next question, more technology related for Amy Adams. What's the current life expectancy of an electrolyzer or a fuel cell today?
Yes. Thanks, James. I think it depends on the technology. So for the alkaline electrolyzers, they have a life of roughly fifteen to twenty five years. And during that time, we would refurbish the stacks every seven or so years.
But that said, we have stacks running we have projects running in the field from well over twenty years right now. With PEM, it's a little different because it's newer technology. So we project a life of roughly sixty four thousand to eighty five thousand hours of operation. So if those are running full time twenty fourseven, that would be about eight to nine years. And I think it's fair to say that's a preliminary estimate because there aren't many PEM electrolyzers that have run that length of time in the field.
For fuel cells, our rough estimate is around twenty thousand hours of operation. The variability comes with the application, whether it's on road or off road, etcetera. So as we continue to have more of these pilots out, as Amy said, and more products in the field, we continue to get better data, and we'll be able to learn more about the operating life of the fuel cells across all of these different applications and use cases.
Great. Thanks, Amy. Next question for Thad here. The question is about synthetic fuels, it looks like. So it looks like there's been a lot of recent discussion around synthetic fuels.
How do you view this market developing over time? And would Cummins play a part in this market?
Thanks, James. We've thought about this as we've thought about hydrogen for quite some time now. And I think it's important to step back and say, hey, so why would people want to do synthetic fuels? And there's two main rationales basically to use that is that if you do that, you can increase the energy density of hydrogen. We talked about that in kind of my opening remarks about the energy, like the volumetric density.
It allows you to trans if you did that, you could then transport it. I mean, lot of people talk about ammonia in this regard. You could transport it in the existing sort of infrastructure that's there today without a lot of extra cost. So you can use it in that way to transport it. And then it can be second is it could be used as a feedstock for all the other processes that we talked about.
So I think so it's definitely as we thought about that and thought about our role in producing hydrogen through green hydrogen, we thought about these things. I think it's still a little ways off. I mean, there are projects that have started today. So there are basically three ways to do it. The, like I said, ammonia, methane, or synthetic diesel basically are the three that we spend time thinking about.
And so while there are projects that exist out in the world that I think there's some opportunity, like a lot of these things, think it remains to be seen as to what role will it play. It will likely play some role because you see projects today already. The question is how big a role will it play and over what time period? Where will this where would the synthetic fuels fit in the industry? And how cost effective, capital efficient are they?
So I think there's still yet some ground to cover here for that. But I do expect them to have some part in it the way we see it today. What that is, it's a little hard to say at this point. Great.
Thanks, Thad. Next question for Amy Adams is related to the aftermarket with some of these new technologies. So the question is, what is the aftermarket opportunity on electrolyzers and fuel cells? And how does it differ from your current technology portfolio?
Thanks, James. I think it's a little too early to tell exactly what the aftermarket opportunity will be with PEM electrolyzers and PEM fuel cells because there aren't that many in the field that have significant hours. But having said that, are maintenance and service that will be required to support the products. And as I mentioned in my earlier comment, the stacks will be refurbished and replaced over time. So a little similar to how a diesel engine would undergo an overhaul or a rebuild.
So that part is a bit similar. And we do know from our experience in heavy duty applications that things break sometimes. And so I think we're well positioned because we have the deep relationships with our end users. And in some cases, today, those market segments already on the diesel side, we have service and parts agreements, We have preventative maintenance contracts. So we have a network that's sort of geared at servicing those applications now and could be trained easily to support them in a fuel cell electric vehicle, battery electric vehicle, etcetera.
Great. Thanks, Amy. The next question relates to technology around fuel cells versus battery electric, it looks like. So Amy Davis, on this one, I'll pass this to you. The question is, why do you believe fuel cells are a more likely solution for high power applications than battery electric?
Sure, James. Yes. So I think about, I guess, three things that really differentiate in my mind. Range, weight, and maybe charging time, that's three, at least three kind of key factors that I think about when it distinguishes what use case would go more for battery versus fuel cell. So if I think about some of the applications, if you think about a line haul heavy duty truck operation, which is traveling long distances and they are compensated for their payloads, so they want to be able to carry as much as possible, Those would obviously be much better suited for fuel cells, and there's other kind of long haul operations that would be similar to that.
But also even in some bus applications where there's longer, routes and the range and the charging time actually make a big difference. So for example, we just announced an agreement with a company in Australia, Bestech, where we're selling both battery and fuel cell solutions to them. And so it's, again, where I like our positioning of having the full range of products because I think many fleets will have mixed solutions probably to meet the variety of use cases that they have.
Great. Thanks, Amy. Next question, we'll give to Tom here. So the question is when do you hope to land a major truck customer for your fuel cells?
As we discussed, we have announced a number of partnerships, and I think those partnerships reflect where the action is today. So we've announced our fuel cell partnership with Alstom. We've announced our electrolyzer partnership with Sinopec. These are the this is the place where the action is today. Today, those are that's where fuel cell and electrolyzer technology is being deployed.
So we, of course, are focusing our partnership actions on those first. Needless to say, though, we believe that transportation sector will be a major user of fuel cells, and we would like to work with truck partners on developing that. And our thinking about that is a lot's going to happen over the next five or ten years in the development and deployment of fuel cells. And so the technology is still moving. People's decisions about how they wanna play in this are moving.
So a lot left to go. While we'd like to have partnerships today, we recognize that any partnership formed today, like the one we did with Navistar to do the the DOE project, is likely to evolve over time as the technology and people strategies evolves over time. So we're not in a big rush. What we are in a rush to is lead in the technology. You will see us investing to make sure that we've got the solutions that customers need wherever they are in their transition between, carbon technologies and low carbon technologies.
Wherever they are in that transition, we are gonna meet them there with the very best technology for their products. And that that's been Cummins' strategy for one hundred years. It will continue to be our strategy. We are not focusing on vehicles. We are not focusing on autonomous trucks.
We are not focusing on how to make sure that we have the best telematics solution for a vehicle. What we are trying to focus on is how to make the best powertrain for those customers to win. And we think with that focus and that investment, the partnerships will come when it's time for them to come. That's what we believe. We are ready we stand ready to work with whoever would like to work with us, but we are definitely focused on trying to deploy the technology in the places where there is action today, where the economics make sense, where the customers are ready to deploy, and we'll work with them, and we'll be ready to work with others as the technology evolves and their strategies evolve accordingly.
Great. Thanks, Tom. One of the exciting partnerships through a joint venture structure that closed last week is actually with mProx. Thad, I was wondering if you could comment on if there are any projections around revenues, profits for that business?
Yes. Thanks, James. Well, before I go to the projections of revenue, I'll just step back and just echo Tom's comments. I mean this is exactly a great example of getting another piece of technology in the chain to make sure that customers have what they need in order to make their vehicle go forward, whether it's a train or a truck or actually the transport of hydrogen in those vessels, right, to make sure that's available and put together as a system or as an individual component for people to having the best. And we feel like we have that in our joint venture with Nprox.
Whether it's and even today, you can use it for natural gas applications. So I think as we step back, I think we're looking at, I would say, in the early days, it would be the mids of tens of millions of dollars. But we see rapid expansion sort of from there, and it kind of depends. Like I said, we're looking at all pieces of the market, not just what's on vehicle, but as a potential to you know, as we talk about hub and spoke models and how to distribute clean hydrogen to places. So we we think that the we know the technology is capable of that, and then, you know, it's a it's a really good technology, Type four, seven hundred bar tank.
So that's the rationales why we did, why we spent time investing in that. And I think we saw in the natural gas market early on, this was slow the adoption of natural on highway natural gas engines to not have a complete system to make sure the thing functioned effectively. It took a number of years for those technologies to as simple as the tanks sound, it's not that simple and even less so with hydrogen. There's more to be done there. So to help move the industry forward, and we think there's opportunity to create a better system by having that.
So early days, we just closed and initially focused on Europe, but we'll move out of those geographies as well, which will add to revenues in the short run. Because as I said, you can use it with natural gas as well as hydrogen. I hope that answers your question.
Next question for Amy Davis. How important is developing scale for Cummins in ensuring success in hydrogen technologies?
Yes. I mean, scale is going to be important, just like it is in our diesel business and in other businesses. Scale is going to help us spread our R and D investment over lots of volumes and accelerate our cost down of our supply chain. And also, I think Tom talked about it earlier, help us get iterations of technology out there faster. So it's going to be really important.
I feel well positioned. I think some of these points have been touched on. But again, being an incumbent in many of these market segments around the world, we have installations in a lot of different applications already, and we're scaling already across these technologies in certain applications. We that should help us as well as our geographical diversity and being in many of these regions where it's going to be adopting at different cases, that will help us get stuff in the field and get volumes out there. So I think in general, I guess I'd make one other point that a lot of people don't really understand that there's some common components or technologies across electrolyzers and fuel cells.
And so the fact that we have both, and Tom talked about electrolyzers coming a little earlier, that may also help us scale up faster in our production in those technologies. So I guess those are kind of three areas that I think will help us, and it's definitely going to be important.
Amy, the way I just add to that, the way I think about it, and we've talked about it before, is square meters of membrane and square meters of gas diffusion layer are square meters, so it all adds. So that's a little different than the way you think about such specific components of an engine necessarily. But that in the early ways, that's a a great way to create scale having both the PEMLux riser and PEMLux, like, as a very simple example, I'd say.
Exactly. Thanks.
Great. Great. Well, I think with that, we've come to the end of kind of the Q and A session today. I really appreciate the panel going through a lot of these questions. Certainly, a lot of interest in hydrogen.
And before we wrap up, I wanted to pass it over to Tom here for any concluding remarks.
Thanks, James, and thanks again to the panel. I really just wanted to say that you can certainly hear in my voice how excited I am about this. There there are a lot of challenges ahead to develop and deploy this technology in a way that's cost effective, high quality, and can replace all the existing technology. There's a lot of work to do. And I think this transition is gonna go over a significant period of time, but we are investing to be ready now.
So we will be ahead of the infrastructure. We will be ahead of whatever carbon cost, regulation comes in. We will be ahead of when all the hydrogen's available. We we will be ready for whatever whenever the industry, whenever the government is ready, we will be ready. And we will be investing to make sure that Cummins plays a significant role in low carbon technology deployment across sectors.
So for us, this is kind of what we're about. We love developing new technology. We love addressing challenges like how to take carbon out of the industry. This is kind of what we were formed to do more than a hundred years ago. So so for us, this is this is the work we were put in place to do.
This is the work we're excited about doing. What we're trying to do now is build more participants, more energy around this so it gets deployed, both quickly and effectively. We really appreciate all of you tuning in and sticking with us for this significant investment in time to learn about the technology. But the more of us that understand it and see its opportunity, I'm convinced, the more that we'll get behind it and begin to drive adoption. So thanks for everybody's attention.
I really appreciate it. Have a great day.