Both Cummins and Alstom lost with hydrogen, but they lost in different ways, and that difference matters. Cummins spread capital and management attention across a broad set of hydrogen pathways, including fuel cells and electrolyzers, then ran into the market reality that hydrogen demand for energy applications was weaker, slower, and more subsidy-dependent than the story suggested. Alstom, by contrast, sold hydrogen trains into real fleets and real contracts. Cummins can write down assets, stop new commercial activity in parts of hydrogen, and move on. Alstom has to keep supporting trains it already put onto tracks, and rail assets tend to live for decades. That means Cummins absorbed a strategic loss, while Alstom is likely to absorb a strategic loss and then keep paying operating and support costs for years afterward. The clearest sign of where Alstom is in this story is its own language. When it announced the acquisition of Cummins’ rail-dedicated hydrogen fuel-cell activities on April 2, 2026, it did not describe the deal as a growth platform, a breakthrough, or a new commercial frontier. It said the acquisition would give Alstom the capabilities it needed to support reliability growth and maintenance for its installed fleet and to conclude development of contracted programs. That is the language of obligation, not expansion. It is the language of a manufacturer taking a critical supplier function in house because the fleet is already sold, the contracts are already signed, and the equipment still has to run. That should not have been a surprise. Hydrogen rail was never competing with diesel in a vacuum. It was competing with overhead wires, partial electrification, and battery-electric trains. That was the central point I made back in 2018 when I argued that hydrogen rail would be measured against batteries and catenary, not against nostalgia for diesel. By 2020, the industry already had published evidence pointing in the same direction. The VDE study in Germany found battery-electric multiple units could be up to 35% less expensive to buy and operate than hydrogen equivalents. By 2022, Baden-Württemberg had gone further and concluded hydrogen passenger trains were about 80% more expensive over their lifetime than battery-electric and overhead-wire alternatives, and it decided not to proceed with hydrogen. Those were not fringe signals. They were decision-grade warnings. What made the Alstom case avoidable is that the company was not trapped in a world without electric alternatives. It had battery-electric products in hand. In February 2020, Alstom signed its first German contract for battery-electric regional trains, eleven Coradia Continental BEMUs for the Leipzig-Chemnitz route, with maintenance through 2032 and a contract value of about €100 million. Alstom’s own current portfolio still presents battery trains that can run under catenary and on non-electrified sections, with a published battery range of up to 120 km. In other words, years before this Cummins acquisition, Alstom already had the ingredients for a more disciplined strategy. It could have made wires and batteries the core of its decarbonized regional rail offer and treated hydrogen as a small, temporary niche. Instead, it kept hydrogen in the product story long enough to accumulate fleets, support obligations, and the need to internalize a supplier capability when the market weakened. The installed base is what turns a bad strategic bet into a long-tail burden. In Lower Saxony, Alstom’s Coradia iLint moved from demonstration to a fleet of 14 trains, supported by dedicated refueling infrastructure. Alstom’s 2022 materials said it had four hydrogen-train contracts at the time, including 14 trains in Lower Saxony, 27 in the Frankfurt metropolitan area, 6 in Lombardy with an option for 8 more, and 12 hydrogen trains shared across four French regions. Even without assuming all options are exercised, that is a meaningful fleet of specialized rolling stock tied to specialized maintenance, hydrogen handling, spare parts, and fuel-cell support. A passenger train can remain in service for 20 to 30 years. If a core subsystem is immature or costly, those costs do not disappear because the narrative has shifted. They show up in availability problems, retrofit programs, service contracts, engineering support, and procurement headaches. The experience in Germany reinforced the spreadsheet logic with operational evidence. Lower Saxony, after running hydrogen trains and fulfilling existing commitments, said it would no longer consider hydrogen trains for future use because they were too expensive to operate compared to overhead lines and batteries bridging non-electrified sections. In the Frankfurt region, the 27-train hydrogen fleet ordered in 2019 for about €500 million was reported in 2025 as still not fully deployed, more than three years late, with technical problems. That combination matters. One state learned from modelled total cost of ownership before buying. Another learned by operating the trains. Both ended up in the same place. That is usually a sign that the problem is structural, not managerial. Cummins provides the other half of the story. It is still, first and foremost, a legacy engine, components, distribution, and power systems company. In 2025 it generated $33.7 billion in revenue. The Engine segment accounted for about $10.9 billion. Components were about $10.1 billion. Distribution was $11.7 billion. Power Systems were $7.5 billion. Accelera, the entire zero-emissions segment, recorded about $460 million for the year. That is about 1.4% of corporate revenue. Put differently, the whole zero-emissions segment was smaller than a single quarter of Cummins’ Power Systems sales, which reached $1.9 billion in the fourth quarter alone. This is not a company transformed around hydrogen or electric drive trains. It is a large incumbent with a small new-energy arm attached to a much larger industrial machine. That does not mean Cummins did nothing sensible. The Meritor acquisition in 2022 was a strong move because it added assets that matter in almost any drivetrain future. Cummins paid about $3.7 billion including assumed debt and net of acquired cash. It said openly that the deal added products to its Components business that were independent of powertrain technology and would help accelerate Meritor’s axle and brake businesses. In 2025, Cummins reported $4 billion in drivetrain and braking systems sales inside Components. That is where the strategic contrast becomes useful. Meritor was a robust hedge because axles, drivelines, brakes, and aftermarket content remain valuable whether the truck is diesel, hybrid, or battery-electric. Hydrogen optionality was the opposite. It depended on the least competitive branch of the transition maturing fast enough to justify the spend. One bet added durable truck content. The other added exposure to a weak energy pathway. By late 2025, the hydrogen side of Cummins’ story was unravelling in public. The company recorded $458 million of charges tied to the electrolyzer business within Accelera. It said it had observed rapidly deteriorating conditions in electrolyzer markets and overall hydrogen markets, along with uncertainty resulting from reductions in government incentives. It then said it intended to stop new commercial activity in electrolyzers while continuing to fulfill existing customer commitments. That is not a small strategic adjustment. It is a public acknowledgment that a major piece of the hydrogen thesis did not survive contact with demand, economics, and policy reality. Meanwhile, the parts of the company doing well were Distribution and Power Systems, with record demand tied in part to backup power for data centers. The core business kept paying the bills while hydrogen optionality turned into write-downs. This is where the word optionality misleads executives and boards. Optionality sounds prudent because it implies flexibility. In practice, optionality only has value when the options are reasonably competitive, or when the cost of preserving them is low enough that failure does not matter. Hydrogen in transport didn’t meet either test. The alternatives were not unknown. They were visible, deployed, and improving. Overhead electrification was mature. Batteries were improving in cost, range, and operating simplicity. In Cummins’ world, battery-electric systems, hybrid drivetrains, and drivetrain-agnostic truck content were better aligned with customer economics and service realities. In Alstom’s world, wires and batteries fit rail operating models better and avoided the burden of adding a new fuel chain, new maintenance practices, and a more complex onboard energy system. Optionality in that setting was not flexibility. It was deferred discipline. There is a Rumelt lesson sitting in plain sight. Good strategy begins with diagnosis, and the diagnosis here should have been simple. For Alstom, the problem was how to decarbonize non-electrified regional rail at the lowest lifecycle cost and with the least operational risk. Hydrogen was not the answer to that question on any routes. Wires and batteries were. The guiding policy should have been electrification first, battery-electric second, and biofuels only where a route-specific analysis showed that both infrastructure and battery solutions failed. The coherent actions would have been to concentrate capital and engineering effort on BEMU platforms, partial electrification packages, charging under existing wires, and service models built around standard electric rail components. Hydrogen could have been limited to tightly bounded demonstrations with explicit sunset criteria. That would not have eliminated risk, but it would have capped exposure. For Cummins, the diagnosis should have been that its durable strengths were systems integration, customer channels, installed-base service, and heavy-duty content that survives propulsion shifts. The guiding policy should have been to win the transition by owning more of the truck and supporting the most credible zero-emissions paths, while imposing strict kill criteria on hydrogen businesses. The coherent actions were sitting there in the Meritor logic. Put capital into axles, brakes, e-axles, hybrid systems, electric powertrains, controls, software, and service. Treat hydrogen as a narrow experimental niche rather than a buffet of pathways spanning engines, fuel cells, electrolyzers, and broad transport narratives. If a business segment cannot get to credible scale without subsidies, if quarterly commercial announcements remain thin, and if the segment stays at 1% to 2% of total revenue while losses widen, that is not a growth platform. It is a candidate for containment. The hard part for industrial firms is that avoidable failure often looks reasonable at the start. Hydrogen trains offered a way to tell a decarbonization story without waiting for wires. Hydrogen powertrain optionality let Cummins say it would be ready for whatever customers wanted. Both narratives had surface appeal. But good industrial strategy cannot stop at narrative appeal. It has to ask basic questions early. What is the incumbent alternative? What is the realistic full lifecycle cost? What happens if the supplier retreats? How much infrastructure sits outside our control. What does the maintenance tail look like? What evidence would cause us to stop? The companies that ask those questions early tend to absorb a few pilot losses and move on. The companies that do not ask them early enough end up buying suppliers to keep fleets running or writing down businesses after spending hundreds of millions of dollars. That is why this case matters beyond hydrogen and beyond rail. These were avoidable failures, not because technology development should be perfect, but because the warning signs were available years in advance. The economics were hypothetical. The alternatives were better and cheaper. The operational complexity was visible. The support tail was foreseeable. Cummins could absorb the loss because hydrogen was small relative to the whole company. Alstom’s hydrogen burden is smaller in corporate revenue terms, but more persistent in operational terms because trains sold into public transport systems come with obligations that do not vanish when enthusiasm fades. Everyone watching should take the right lesson from that. The point is not to mock old hydrogen bets. The point is to derisk the next set of decisions before they harden into contracts, fleets, and decades of follow-on cost.
