Valley of the Sun Clean Cities Coalition Scott Bentz

CRM Attendees

§ Scott Bentz – VP On Highway Business

§ Mike Barr – Territory Manager – Dealer Support

§ Guy Remenap – Territory Manager Muni / Transit

Agenda

§ Where are we today on emissions? § Natural Gas vs. Clean Diesel § What is next? § Alphabet soup, or OBD, GHG, NOx, PM, and other

regulatory issues § Open discussion and Q&A

§ 14 branch locations (white stars)

§ 6 twig locations (black stars)

§ 10 states § 3 dedicated Power Gen

locations § 1 High-Horsepower

Rebuild Center (>19L engines)

§ 880 team members

CRM Footprint

Global Production Leader

Source: Power Systems Research, 2011

2.8-15L Diesel Engines

In Thousands

§ 9/9/13 § Cummins Confidential § 6

§  Natural Gas §  Diesel

Broad Product Range

§ A major expansion of the range since the late 1990s, with twice the number of engine platforms covering 49 to 4200 horsepower

§ ISF/QSF2.8

§ QSK95

Our History of ‘Firsts’

§  First to market with the best products

§  First in diesel innovation with over 1500 active patents

§  First to establish overseas manufacturing in emerging economies

Since 1919, the list of Cummins ‘Firsts’ in diesel achievements & world speed records is unequalled in the industry

Emissions Leadership

§ EPA ’98

§ 0.01 § 0.0 § 0.02 § 0.03 § 0.04 § 0.05 § 0.06 § 0.07 § 0.08 § 0.09 § 0.10 § 0.11 § 0.12 § 0.13

§ 0.0

§ 0.5

§ 1.0

§ 1.5

§ 2.0

§ 2.5

§ 3.0

§ 3.5

§ 4.0

§ 4.5

§ 5.0

EPA NA Emission Standards §  N

Ox

– g/

hp-h

r

§ Particulate – g/hp-hr

§ EPA ’02

§ EPA ’07

§ EPA ’10

§ Cummins Confidential

Generic History of Emission Reduction § 2002

–  EGR for NOx reduction – MPG loss due to engine efficiency

§ 2007 –  DPF for PM (particulate matter) reduction – MPG loss (minor) for regeneration

§ 2010 –  SCR (Urea) used for additional NOx reduction – MPG increase from use of SCR

§ 2013 / 2014 –  CO2 reductions – MPG increases

Banking, Trading and Credits

§ Cummins has the option to use credits § Currently, the only engine that Cummins uses the

credit strategy is the ISX 400-450 HP over the road truck engine

§ All other engines and ratings meet NOx and PM § Reason?

– Fuel economy vs. emissions

§ EPA supports this, as it actually gives a 20% advantage towards emissions

0

5

10

15

20

25

30

35

40

45

50

55

60

Perc

ent

Shar

e

Cummins DDC Cat Mack Navistar MBE Volvo PACCAR

`

`

North American Heavy-Duty Truck Shipments Engine Manufacturers’ Market Share*, May 2013

§ * Wards NA Heavy Duty Market Share (Class 8 Group 2)

1998-2011 Annual Share

2012-2013 Monthly Share

§ 9/9/13 §  Cummins Confidential § 16

Cummins Class 6 & 7 Market Share* Among Engine Manufacturers

* Wards NA Medium Duty Market Share data (Class 6 and Class 7 data), ACT historic build data and Cummins account teams data

Cummins 53.2%

CAT 0.0% DDC

0.0%

Hino 11.2%

MBE 0.8%

Navistar 34.8%

2012 Market Share

Cummins 62.5%

CAT 0.0% DDC

0.0%

Hino 6.7%

MBE 1.6%

Navistar 29.2%

2013 Market Share (June YTD)

US Trends – Passenger and Light Truck

§ Despite the sizable uptick in registrations for diesels, they still only comprise a little less than 3 percent of the market, vs. 50% for Europe.

§ Automakers are adding diesel vehicles because of higher Corporate Average Fuel Economy standards, which will climb to 54.5 miles per gallon by 2025.

§ Top 3 States with Fastest Growth in Diesel Cars and SUVs from 2010 to 2012:

§ 1) California +55% 2) Massachusetts +45% 3) New York +43%

Breaking News

§ Navistar announced ISB6.7 will be available in IC Bus and MD Trucks – Replaces Navistar DT466

§ Cummins ISV5 announced in Nissan Titan – Light duty Pickup 300HP 550 LB/FT rating

OEM Availability

OEM ISX15 ISX12 ISL9 ISB6.7 ISX12G ISL9G Autocar X X X X X Bluebird X X X

Ford X Freightliner X X X X X X International X X X X

Kenworth X X X X X X Mack X X X

Peterbilt X X X X X X Thomas Bus X X X

Volvo X X X Western

Star X

What happens in 2014 for GHG and CO2?

The chassis manufacturer will certify the vehicle for tires

The engine manufacturer will certify the engine for NOx, PM and CO2

The tractor manufacturer will certify the vehicle for aerodynamics, weight, tires, idling and

speed limiters

Voca

tiona

l Veh

icle

s E

ngin

es

Com

bina

tion

Trac

tors

Component Test

Rolling Resistance

CO2 (g/ton*mile)

Vehicle Model

Vehicle Speed Limiter (VSL)

Controls Settings

Automatic Engine Shutdown (AES)

Aerodynamic Cd

Weight Reduction

Combination Tractor Simulation Weight Reduction Methods

Vehi

cle

Spe

ed L

imite

r (V

SL)

Controls Settings

Automatic Engine Shutdown (AES)

Tractor Compliance – Engine Features

Class 8 sleeper cabs only Vehicle credit for automatic shutdown within 5 minutes Delays allowed under certain conditions (e.g., PTO operation)

Vehicle credit for speed limit < 65 mph Provisions for adjustable and “soft top” limits

§ CO2 Emissions

Summary

§ Continuous Improvement – No new emissions hardware for foreseeable future

§ Greenhouse Gas Regulations 2014 – Carbon dioxide requirements – Cummins certified in 2013

§ Fuel Efficiency § Greenhouse Gasses § Greenhouse Gasses

Heavy-Duty Diesel Engine Standards

2014 2017 Vocational 3% 5% Tractor 3% 6%

2010 vs 2013 OBD Topic OBD 2010 Requirements OBD 2013 Requirements

Product scope One engine family requires OBD certification per engine OEM –Only one engine rating per year requires certification demonstration

All engines families require OBD certification

Emission threshold monitoring

Certify major emissions threshold monitors to 2.5 times emissions threshold limit

Certify major emissions threshold monitors to 2.0 times emissions threshold limit

Compliance of monitors Compliance demonstration of approximately 32 major monitors

Compliance demonstration of approximately 35-40 major monitors

Communication protocol Communicated using an OEM proprietary protocol format

OBD diagnostics information communicated using industry STD J1939 protocol format. (OEM proprietary format no longer acceptable)

Performance ratio Only required to be tracked and reported

Liability for not meeting performance ratio requirements

Reporting Not Required Increased reporting requirements

Changes

Natural Gas

§ Cummins Confidential

Stoichiometric EGR Three Way Catalyst

Architecture

CWI Combustion Technology Spark Ignited Stoichiometric with Cooled EGR

Three Way Catalyst

EGR Cooler C

harg

e A

ir C

oole

r

Throttle

Fuel

Spark Ignited

Spark Plug

§  Fuel, EGR and air are premixed outside the cylinder

§  Spark plug ignites the mixture

§  Air flow controls fuel flow

§  Air/Fuel ratio controls emissions

Catalyst Inlet

NOX CO

HC

Catalyst Outlet

N2 CO2

H2O

Three Way Catalyst

TWC reduces three harmful emissions: NOX, CO, HC

End products are: N2, CO2, H2O

Packaged as part of muffler

Simple, passive device O2 Sensor connects to ECM

Consistent performance across all duty cycles

Three “Es” of Natural Gas

Economics

•  Natural Gas costs about 40% less than diesel

•  Fuel use reduces payback

Energy Policy

•  Abundant domestic supply of natural gas in North America

•  The United States ranks in the top 2 for annual natural gas production*

•  Reduce crude oil imports

Environment

•  Reduce GHG emissions

•  Reduced engine noise

•  Simple Aftertreatment

§ *According to “The World Factbook,” the United States produced the 2nd

most Natural Gas in 2011 with 669,600,000,000 cubic meters

§ Source: U.S. DOE / Clean Cities Alternative Fuel Price Report (April 2013).

Natural Gas commodity prices ~40% price advantage at the retail pump

CNG (DGE) Price Difference by State

§ RI 3

§ MD 3

§ DE 1

§ NJ 5 § NV § 4

§ WA § 7

§ OR § 3

§ CA § 119

§ AK § 0

§ AZ § 8

§ UT § 38

§ ID § 2

§ MT § 3

§ WY § 4

§ CO § 10

§ NM § 3

§ TX § 25

§ OK § 53

§ KS § 2

§ NE § 4

§ SD § 0

§ ND § 2 § MN § 5

§ IA § 1

§ MO § 2

§ AR § 3

§ LA § 11

§ MS § 1

§ IL § 7

§ WI § 22

§ IN § 8

§ KY § 3

§ TN 3

§ AL § 5

§ FL § 7

§ GA § 8

§ SC 3

§ NC 15

§ VA § 3

§ WV § 0

§ OH § 12

§ PA § 13

§ ME 1

§ MI § 10

§ NY § 28

§ VT § 1 § NH 1

§ MA 11

§ CT 7

§ HI 0

§ DC 2

§ Source: Alternative Fuels & Advanced Vehicles Data Center (DOE); NGVAmerica website § May 2013

13

5

5

1

1

1

§ 100+

§ 75-99

§ 50-74

§ 25-49

§ 1-24

§ 0 35

§ # of LNG Stations

§ # of CNG Stations

Public Natural Gas Stations in the U.S.

2

1

1 1

1

§ ALL CNG Stations are capable of handling a MD or HD Vehicle and can fill a tank to 3600 PSI.

§ RI 0

§ MD 0

§ DE 0

§ NJ 4 § NV § 4

§ WA § 0

§ OR § 0

§ CA § 12

§ AK § 0

§ AZ § 1

§ UT § 2

§ ID § 2

§ MT § 0

§ WY § 0

§ CO § 1

§ NM § 0

§ TX § 5

§ OK § 1

§ KS § 1

§ NE § 0

§ SD § 0

§ ND § 0 § MN § 0

§ IA § 0

§ MO § 0

§ AR § 3

§ LA § 0

§ MS § 1

§ IL § 2

§ WI § 2

§ IN § 3

§ KY § 0

§ TN 0

§ AL § 0

§ FL § 4

§ GA § 5

§ SC 0

§ NC 3

§ VA § 0

§ WV § 0

§ OH § 8

§ PA § 6

§ ME 0

§ MI § 1

§ NY § 3

§ VT § 0 § NH 1

§ MA 1

§ CT 1

§ HI 0

§ DC 1

§ Source: Alternative Fuels & Advanced Vehicles Data Center (DOE); NGVAmerica website § May 2013

5

3

10

2

1

2

§ 100+

§ 75-99

§ 50-74

§ 25-49

§ 1-24

§ 0 71

§ # of Planned § LNG Stations

§ # of CNG Stations

Planned Natural Gas Stations in the U.S.

2

1

2 1

2

§ ALL CNG Stations are capable of handling a MD or HD Vehicle and can fill a tank to 3600 PSI.

2

2

2

5

1

2 4

2 1

1

2

2

1

3

3

1

2

1

1

2

North American natural gas engine adoption rate forecast by market segment

Market Segment NG Market Adoption Rate

2012 2017 Projection

Transit Bus 9% 15-20%

Refuse Truck 29% 50-60%

HD Truck < 1% 4-10%

§ 36

§ Cummins Confidential

§ Manufactured in Rocky Mount Engine Plant – Serviced by Cummins

Distributors and qualified dealers

§ Manufactured in Jamestown Engine Plant – Serviced by Cummins

Distributors and qualified dealers

Natural Gas Engines: Features

§  ISX12 G : 12 Liters §  ISL G : 9 Liters § Uses 100% Natural Gas

–  Capable of CNG, LNG or RNG

§  In-line 6 cylinder § Charge-Air Cooled (CAC) § Stoichiometric EGR Combustion § Spark Ignited § Three Way Catalyst Aftertreatment § Manufactured by Cummins

Benefits of Stoichiometric EGR Combustion § Spark ignition

– CWI engines use 100% Natural Gas

§ Uses CNG, LNG, RNG – Allows flexibility for end user

§ Simple aftertreatment – Three Way Catalyst aftertreatment

• Passive device • No regeneration • Eliminates aftertreatment maintenance costs

Three Way Catalyst Aftertreatment

§ Similar to catalyst on gasoline passenger cars

§ Packaged as a muffler with vertical or horizontal mount

§ Weighs ~100 pounds

§ Passive device

§ Benefits: – Maintenance-free –  Reliable –  No regeneration events –  Easy to install in vehicle

§ 40

Natural Gas Engines: Technical Specs

Horsepower 250-320 hp

Torque Range 660-1,000 lb-ft

Transmission Automatic

Clutch Engagement 550 lb-ft

Engine Braking No

System Weight 1,725

Horsepower 320-400 hp

Torque Range 1,150-1,450 lb-ft

Transmission Automatic / Manual

Clutch Engagement 700 lb-ft

Engine Braking Yes

System Weight 2,750 lbs

§ Fuel § Module

§ EGR § Valve

§ Wastegate § Turbo

§ Coil on Plug Ignition

§ 2 Valve Cylinder Head

§ Engine Control § Module

§ Ignition Control § Module

The Right Applications

§ ISL G – MidRange Engine – Pickup and Delivery

Truck – Vocational – Up to *66,000 lbs GVW – Less than 60,000 miles

per year

§ *Refuse Packer ,Crane / Cherry Pickers, Concrete Ready Mixer allow up to 80,000 GVW

§ Fuel § Module

§ Engine Control § Module

§ Ignition Control § Module

§ EGR § Valve § Wastegate

§ Turbo

§ Coil on Plug Ignition

§ 4 Valve Cylinder Head

The Right Applications

§ ISX12 G – Heavy Duty Engine – Regional haul – Vocational – Up to 80,000 lb GVW – Any natural gas application

exceeding 60,000 miles per year

§ Cummins Confidential

§ ISB6.7G

www.cumminswestport.com

New Website launched May 15, 2012 Great source of information about natural gas engines and vehicles. Features the Natural Gas Academy, a series of instructional videos Designed to provide a general overview of natural gas as a fuel whether it is compressed (CNG) or liquefied (LNG), and how it is used with vehicles.

ISX12 G engine walk around video added Sept, 2012