The US engine manufacturer confirmed the move in its full-year 2025 results, reporting $458m in impairment and restructuring charges linked to its electrolyser business within the Accelera unit.

Cummins said conditions in electrolysers and broader hydrogen markets deteriorated rapidly during the second half of the year, driven by weak customer demand and uncertainty around government incentives.

This prompted an interim impairment review in Q3, followed by a reassessment of the business.

As part of that review, Cummins determined the goodwill associated with its electrolyser reporting unit was fully impaired, resulting in a $210m non-cash charge in Q3. It also recorded $30m in excess and obsolete inventory write-downs.

Market conditions continued to worsen into Q4, with Cummins deciding to exit new electrolyser sales, while continuing to fulfil existing customer commitments.

This move triggered further inventory write-downs, intangible and fixed asset impairments, as well as, $13m in severance costs and $34m in contract termination charges.

The company has not yet revealed what will happen to its extensive electrolyser manufacturing sites.

Since 2022, the company has built up 1GW of electrolyser manufacturing capacity between its Minnesota plant in the US, and an all-new 500MW PEM electrolyser plant in Spain, which opened in 2024.

The announcement comes after the company’s CFO Mark Smith told investors demand for its electrolysers had “dried up”, with the decline felt most sharply in the US.

“Not only are orders shorter now, but that’s creating a hole in projections for the next couple of years,” he told investors. “That’s why we’re acting now.”

Cummins’ electrolyser foothold also comes from a strong background. In 2019, it acquired a majority stake in Canadian hydrogen technology firm Hydrogenics, where it gained both its PEM and alkaline product lines.

While it quietly stopped promoting its alkaline systems around 2023, it had sealed several double-digit-megawatt deployments in the US, and is lined up to supply BP’s 100MW plant in Germany.