October 5th, 2020 Hino Trucks, a subsidiary of The Toyota Group Company announced their Project "Z". This was the Company's development plan to offer zero emissions vehicles (ZEV) for class 4 to 8 medium and heavy duty trucks in the North American market with customer demonstrations in 2022 and production starting in 2024.
Project Z was a development plan to bring Fuel Cell and BEV to the whole medium and heavy duty product line for customers along side Diesel as the industry started to convert over. The long 5 year plan was expected due to the continued R&D that would be needed on Diesel trucks to meet global emission standards and the development time for fuel cell and BEV trucks.
During the Virtual 2021 NTEA Work Truck Show, Hino Trucks announced their intent to produce all class 4 to 8 trucks using Cummins engines for sale in North America. This is the Cummins B6.7 and L9 motors to start being produced in the Hino's L and XL Series models at the end of 2021. Additional models moving forward will come out to cover all truck lines allowing for a much reduced investment in R&D while at the same time allowing Hino to ramp up their efforts to move over sooner to a Zero Emission fleet of trucks.
As such, this announcement allows Hino and Cummins to secure long term diesel motor production for existing sales of such trucks and Hino is able to focus on Zero Emission vehicles (ZEV) using BEV and Fuel Cell technology. Hino has now moved up their time line with production of Fuel Cell and BEV trucks in Q4 of 2022 with full production by the end of 2023 rather than the end of 2024.
A couple of take aways from both the Cummins and Hino announcements and projects:
- Hino can shift resources from Diesel R&D to Project Z. Cummins secures long term diesel powertrain commitments. Both OEMs secure a new partnership that helps offset R&D investments.
- Cummins partnership contracts for diesel powertrain also secures revenue stream allowing Cummins to invest in their own ZEV Powertrains.
- Both companies have stronger long term growth prospects with this partnership allowing both stocks to grow.
- Additional commitments by HINO to the battery production industry securing large size battery cell production contracts. Battery suppliers another grow industry to consider.
HINO is a very popular truck line used in inner city deliveries as well as the suburbs and rural areas. Having a diverse portfolio of ZEV and Diesel trucks with a solid know power train from Cummins is a win win for Fleet buyers. Hino is lookin to lead the medium / heavy duty truck market in North America as well as around the world being ready for the needs of ZEV solutions while strongly supporting the needs of Diesel fleets.