Clean Cities Webcast

Cummins WestportGordon Exel

Cummins Westport Inc. Business Overview

2005

CWI EvolutionOld CWI JV

•Automotive - 6/8L transit, refuse & mid range truck (SI)

•Automotive - 15L class & heavy duty truck (HPDI)

•Powergen - 60L low emissions applications

New CWI JV

Automotive 6-9L transit,

refuse & mid range truck (SI)

Technology Partnership

Cummins + WestportHPDI technology development

Westport Demonstration

ProjectsHPDI

Worldwide Focus – Leverage International R&D

ASIA

Mandates increasing

GHG concerns

Increasing infrastructure development

Natural gas consumption increase

FOCUS: China, Thailand & Bangladesh, Taiwan, Phillipines

ASIA

Mandates increasing

GHG concerns

Increasing infrastructure development

Natural gas consumption increase

FOCUS: China, Thailand & Bangladesh, Taiwan, Phillipines

MEXICO

BRAZILAUSTRALIA

CANADA

USA

AMERICAS

Mandates increasing?

Strong incentives?

Rapidly developing infrastructure

Emissions trading potential

LNG import growth

US Energy security concerns

FOCUS: US Non-Attainment Areas, Mexico, Brazil

AMERICAS

Mandates increasing?

Strong incentives?

Rapidly developing infrastructure

Emissions trading potential

LNG import growth

US Energy security concerns

FOCUS: US Non-Attainment Areas, Mexico, Brazil

EUROPE, MIDDLE EAST & INDIA

Potential EU Directive

GHG reduction focus

Growing mandates and incentives

Moderate infrastructure development

FOCUS: UK, France, Eastern Europe, Egypt, India, Iran, Pakistan

EUROPE, MIDDLE EAST & INDIA

Potential EU Directive

GHG reduction focus

Growing mandates and incentives

Moderate infrastructure development

FOCUS: UK, France, Eastern Europe, Egypt, India, Iran, Pakistan

UK

FRANCE

We are moving the JV to have a truly worldwide focus with specific target countries

INDIA

CHINA

•2000 natural gas buses make it the largest LBSI CNG bus fleet in the world

•Cummins Westport is currently the sole natural gas engine supplier to Beijing Transport

•Running 18 hr per day, 7 days per week

•90% of 18,000 bus fleet to be operating on “clean engines” by 2008 Olympics

Beijing Success Story

•400 trained service personnel on Cummins natural gas engines - this is the key to success

2007 Technology

Key Characteristics-Diesel vs. NGWhat Might Be!

L 10 G C 8.3 C Plus ’07 GasEmissions Better Better Better BetterReliability Worse Worse Similar SimilarFuel Cost/Mile

Worse Worse Similar Better

Durability Worse Worse Similar SimilarLCC Worse Worse Worse BetterTimeline 1989 1996 2001 2007

Diesel/CNG Pathways to 2010

Diesel• ULSD• Diesel Particulate Traps• EGR• Nox Absorber or SCR• SCR more efficient but a liquid that will be

regulated and taxed

• Lube Oil– Will require new, more expensive oil

• Different oil filters– Will require new, more expensive

filters

• Crank Case ventilation absorbed in ’07

– Sensor impact

Natural Gas• EGR• TWC

Next Generation TechnologyCooled EGR

• Lower emissions with use of simple passive TWC• Higher efficiency with combustion enhancements

Three Way Catalyst

(as applied to passenger car)

EGR Valve LBSI Oxicat

Turbo

3-Way Catalyst

• Simple passive device, like oxidation catalyst

• Highly effective control of HC, CO, aldehydes, and ultra fine particulates

• ~95% NOx conversion effectiveness• Useful life requirement of 435,000 miles

CNG/Diesel/Hybrid LCC & Emissions Comparison

Key Assumptions

• Assumes 25% CNG/Diesel base fuel cost differential• Hybrid fuel economy based on GM/Allison promotional

material• Hybrid continuous technology improvement assumed -

both capital and battery life• Assumes US transit funded at 83% of initial capital cost

(Huge benefit to hybrid LCC)• Model assumes diesel penalties for EGR and exhaust

aftertreatment• Assumes planned gains in efficiency with 2007 CNG

technology, and includes all capital and operating costs related to infrastructure requirements

NO

x E

mis

sio

n L

eve

l (g

/bh

p-h

r)

0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

$0

$500

$1000

$1500

$2000Diesel NOx - Diesel

Annual Incremental Capital and Operating Costs - Urban Bus

2004-2006 2007-2009 2010+

Diesel LCC increases with ULSD, EGR, exhaust aftertreatment efficiency and operating cost penalties

Same engine related costs transferred to diesel hybrid

Baseline: 2004 Diesel

NO

x E

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sio

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l (g

/bh

p-h

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0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

$0

$500

$1000

$1500

$2000Diesel Hybrid NOx - Diesel NOx - Hybrid

Annual Incremental Capital and Operating Costs - Urban Bus

2004-2006 2007-2009 2010+

Hybrid LCC flat due to declining initial cost/battery life benefits offset by diesel cost penalties

Diesel Hybrid CWI NOx - Diesel NOx - Hybrid NOx - CWI

NO

x E

mis

sio

n L

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l (g

/bh

p-h

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0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

$0

$500

$1000

$1500

$2000

Annual Incremental Capital and Operating Costs - Urban Bus

2004-2006 2007-2009 2010+

CNG declining LCC - efficiency gains and no complex after treatment costs

CNG is now and will continue to be the emissions leader

Summary

LOWER EMISSONS BEFORE 2010LOW RISK, PROVEN TECHNOLOGYENERGY SECURITYEMERGING ECONOMIC BENEFITS

Gordon Exel

www.cumminswestport.com

Cummins Westport Inc.604 718-8100