Cummins Reassesses Hydrogen Production Amid $240M Electrolyzer Charge

On November 6, 2025, Cummins Inc. pulled the trigger on a strategic review of its hydrogen electrolyzer arm, Accelera, after taking a $240 million non-cash charge. They chalk that up to ongoing EBITDA losses and a sharper-than-expected drop in orders for green hydrogen gear—a clear reminder that scaling up electrolysis technology isn’t always a straight shot.

Key Takeaways

• Strong overall Q3 2025 performance, but the electrolyzer division went into the red.
• The $240 million impairment mirrors soft market outlooks and policy uncertainty.
• Big electrolyzer sales have fallen well short of the $400 million target set in 2020.
• The review will explore pivoting, divesting, restructuring or doubling down.

Market Headwinds and Demand Slump

It’s not just Cummins—there’s a broader pullback along the hydrogen infrastructure supply chain. Projects in Europe and North America are stalling as policymakers haggle over incentives, and everyone’s waiting for proof that hydrogen production can stand on its own without hefty subsidies. Cummins insiders point to slow permitting, steep upfront costs and weaker-than-expected offtake deals as the main culprits behind the slide in orders.

Strategic Review Underway

At a high level, the review will dig into options like:

• Scaling down Accelera’s footprint to focus on smaller, modular electrolyzer units;
• Teaming up with partners or forming joint ventures to share development risk;
• Exploring a possible divestiture if market fundamentals don’t bounce back;
• Redirecting capital to high-margin core segments—think diesel and natural gas engines.

No final decisions have been made yet, but initial recommendations are expected by early 2026. Investors will be all ears—any shift away from electrolyzers could signal a broader industry rethink.

Cummins’ Broader Business Context

Despite the hiccup at Accelera, Cummins Inc. remains financially solid. Q3 2025 revenues got a boost from strong sales of power generation sets and filtration systems. The bet on industrial decarbonization is a long-term play, and for now, the tried-and-true engine and generator segments are funding R&D into emerging clean energy markets.

Historical Perspective

Back in 2020, Cummins first waved the flag on electrolyzers, projecting $400 million in annual sales by 2025. At the time, optimism around green hydrogen was sky-high, seen as the linchpin for decarbonizing heavy industry. Today, the path to grid-scale electrolysis has turned out to be bumpier and longer than even a century-old manufacturer with deep pockets planned for.

Industry Implications

By pausing to reassess, Cummins is sending a cautionary signal to suppliers, investors and policymakers alike. A slowdown from one of the sector’s biggest hopefuls could stall related projects—from electrolyzer gigafactories to hydrogen refueling networks. Regional manufacturing hubs, especially in the U.S. Midwest, might feel downstream effects on jobs and capital spending, although the full picture is still emerging.

Looking Ahead

As we roll into 2026, the big question is how fast—and at what scale—green hydrogen can break free from pilot programs and shed its subsidy crutches. Cummins’ strategic review could set the tone for other industrial players weighing the risks of early entry against the perks of first-mover advantage. Keep an eye on policy shifts, new partnership announcements and any fresh guidance in next quarter’s earnings call.