Advanced Engine Technology to Meet the Needs of NAFTA Markets Dr. Donald Stanton Director – Advanced Engine Development April 2014

Agenda

Business Drivers

Macro Trends in Heavy-Duty Engine Applications

U.S. Phase 1 GHG

Technology Roadmap for GHG Reduction

Engine and Vehicle Technology Demonstrations

Concluding Remarks

2

Globalization Urbanization Economic growth in emerging and developing markets Exhaust emission standards in world markets Increasing demand for energy with rising prices Infrastructure spending

Faster to Market - Reduced cycle times Better Designs - Right the First Time Using our most advanced tools to design and

develop - “Fit for Market” products Integrated system solutions Reduced product development costs Global technical footprint

What is driving the business environment?

3

Macro Trends – Heavy Duty Intense focus on fuel economy and operating costs Diverging cost of diesel fuel and natural gas Focus on Total Cost of Ownership Vertical Integration FE / GHG regulation The Global Economy

Trucks moved 9.2 billion tons of freight last year*

Trucks hauled 67% of all freight in 2012*

Burned 37 billion gallons of diesel fuel

Travelled 400 billion miles

* ATA American Trucking Trends, 2012/2013

4

Clean Diesels – A Success Story

5

0

2

4

6

8

10

12

1988 1990 1995 2000 2005 2010 2015 2020

10.7g/HP-hr

6.0g/HP-hr

5.0g/HP-hr

4.0g/HP-hr

2.5g/HP-hr

1.2g/HP-hr* 0.2g/HP-hr

0

0.1

0.2

0.3

0.4

0.5

0.6

1988 1990 1995 2000 2005 2010 2015 2020

0.6g/HP-hr

0.25g/HP-hr

0.1g/HP-hr

0.01g/HP-hr Urban Bus 0.05g/HP-hr

NOx / NOx+HC Particulate

OBD ULSD

Phase I Phase II

On-Board Diagnostics Required across all engines by EPA and ARB in 2013 Detects emissions related malfunctions and alerts the operator

FTP FTP

+ SET

FTP

FTP +

SET

Phase 1 US GHG Diesel Engine Standards 2011 U.S. EPA/NHTSA regulation

– Separate vehicle and engine standards

Utilize existing regulatory provisions – certify the engine as today for NOx and PM but now add CO2

Different standards for Tractor and Vocational engines

Standards range from 3% improvement in 2014 to 9% in 2017 over a 2010 industry baseline

Standards for CH4 and N2O emissions

Technologies to Reduce CO2 Emissions

Waste Heat Recovery

Aftertreatment

High Efficiency

Clean Combustion

Reduced CO2 = Fuel Efficiency

Hybrids

Idle

Reduction Low Carbon

Fuels

7

Engine Efficiency Evolution

35

40

45

50

55

60

1985 1990 1995 2000 2005 2010 2015

Brak

e Th

erm

al E

ffici

ency

(%)

2020

Class 8 Line Haul Application: Highway Cruise Condition

2014 GHG Target (Represents 3% Reduction in CO2)

2017 GHG Target (Represents 6% Reduction in CO2)

Cummins SuperTruck Technology

Demonstration (51% BTE)

Cooled EGR, VG Turbochargers Particulate Filter

SCR + OBD

8

Engine System Includes WHR

Transmission/Axle Technology

Next Generation LRR Tires

Advanced Aerodynamics

Idle Management (APU)

Route Management

System

Driver Display with Fuel Economy Tools

Weight Reduction

Freight Efficiency Enabling Technologies Vehicle Freight Efficiency (ton-mile per gallon)

9

Vehicle Demonstration of Freight Efficiency Improvement

0

10

20

30

40

50

60

70

80Fr

eigh

t Eff

icie

ncy

Impr

ovem

ent (

%)

Approximately 19% reduction in Engine Fuel Consumption

Drive Cycle 24 hour Duty Cycle

10

Concluding Remarks

The Clean Diesel engine is delivering the goods across the US and across the world

Near Zero emission of NOx and Particulate Meeting the US GHG regulations ahead of schedule Further significant improvements in engine efficiency:

– Base engine improvements – Rankine Cycle – Advanced NOx aftertreatment

GHG regulation of the engine is key to investment Natural gas powered commercial vehicles can also play

a key role going forward: – Lower CO2 emissions – Energy independence – Operating costs

11

WHR Exhaust Heat Exchanger Exhaust

Aftertreatment WHR Expander Drive Module

WHR Recuperator

WHR EGR Heat Exchanger

WHR Condensor

50,000 Miles on Two Trucks with WHR

Waste Heat Recovery Trucks on the Road