Clean Cities Webcast Cummins Westport Gordon Exel Cummins

Clean Cities Webcast Cummins Westport Gordon Exel

Cummins Westport Inc. Business Overview 2005

CWI Evolution Old CWI JV • Automotive - 6/8 L transit, refuse & mid range truck (SI) • Automotive - 15 L class & heavy duty truck (HPDI) • Powergen - 60 L low emissions applications Technology Partnership Cummins + Westport New CWI JV Automotive 6 -9 L transit, refuse & mid range truck (SI) HPDI technology development Westport Demonstration Projects HPDI

Worldwide Focus – Leverage International R&D UK CANADA FRANCE USA CHINA MEXICO AMERICAS Mandates increasing? INDIA BRAZIL AUSTRALIA Strong incentives? Rapidly developing infrastructure EUROPE, MIDDLE EAST & INDIA Emissions trading potential Potential EU Directive LNG import growth GHG reduction focus US Energy security concerns Growing mandates and incentives FOCUS: US Non-Attainment Areas, Mexico, Brazil Moderate infrastructure development Increasing infrastructure development FOCUS: UK, France, Eastern Europe, Egypt, India, Iran, Pakistan Natural gas consumption increase We are moving the JV to have a truly worldwide focus with specific target countries ASIA Mandates increasing GHG concerns FOCUS: China, Thailand & Bangladesh, Taiwan, Phillipines

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

2007 Technology

Key Characteristics-Diesel vs. NG What Might Be! L 10 G C 8. 3 C Plus ’ 07 Gas Emissions Better Reliability Worse Similar Fuel Cost/Mile Worse Similar Better Durability Worse Similar LCC Worse Better 1989 1996 2001 2007 Timeline

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

Three Way Catalyst (as applied to passenger car) EGR Valve Turbo LBSI Oxicat

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

NOx - Diesel 3. 5 $1500 3. 0 $1000 2. 5 $500 2. 0 Baseline: 2004 Diesel $0 1. 5 1. 0 NOx Emission Level (g/bhp-hr) Diesel $2000 0. 5 0 Diesel LCC increases with ULSD, EGR, exhaust aftertreatment efficiency and operating cost penalties Same engine related costs transferred to diesel hybrid

Annual Incremental Capital and Operating Costs - Urban Bus Hybrid NOx - Diesel NOx - Hybrid 3. 5 $1500 3. 0 $1000 2. 5 $500 2. 0 $0 1. 5 1. 0 0. 5 0 2004 -2006 2007 -2009 2010+ Hybrid LCC flat due to declining initial cost/battery life benefits offset by diesel cost penalties NOx Emission Level (g/bhp-hr) Diesel $2000

Annual Incremental Capital and Operating Costs - Urban Bus Hybrid CWI NOx - Diesel NOx - Hybrid NOx - CWI 3. 5 $1500 3. 0 $1000 2. 5 $500 2. 0 $0 1. 5 1. 0 0. 5 0 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 NOx Emission Level (g/bhp-hr) Diesel $2000

Summary

LOWER EMISSONS BEFORE 2010 LOW RISK, PROVEN TECHNOLOGY ENERGY SECURITY EMERGING ECONOMIC BENEFITS

Gordon Exel www. cumminswestport. com Cummins Westport Inc. 604 718 -8100