Cummins (CMI) announced on a call this week that it is planning to begin production of electric power trains for transit buses in cities around the world in 2019.
The company, known for making natural gas and truck engines, also said it will expand into industrial and commercial uses in the future as the battery range for electric vehicles grows.
The move takes on electric vehicle maker Tesla (TSLA) , which recently teased that it is planning to unveil an electric truck in September. If Tesla were to do this it would stand alone in the electric vehicle market, at least until Cummins comes along.
Cummins "is further along than was previously known in addressing what is likely its single biggest long-term risk: that electric will replace diesel as the dominant fuel source for commercial vehicle powertrains. We believe there are still many unanswered questions (the big three: cost, weight, and range) around electric commercial vehicles in general and that the pace of adoption will be slower than seen in light vehicles," Stifel said in a note.
"But, no matter the timeline or eventuality, we believe Cummins has demonstrated that it intends to be a major player in that market when it develops and that it will not be caught flat-footed if the market moves away from its core diesel engine business," the note continued.
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Editor's Pick: Originally published Jun. 15.