Allison Transmission Holdings, Inc. ALSN, a leading manufacturer of propulsion systems for commercial and defense vehicles, has announced a new partnership with Cummins Inc. CMI, a global leader in power technology. The collaboration will focus on integrating and certifying a Cummins B-Series engine with ALSN's eGen Flex electric hybrid propulsion system for the transit market. This system will comply with the Environmental Protection Agency's "Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles – Phase 3" and deliver a low-emission propulsion solution starting in 2027.

Per Rohan Barua, vice president of North America Sales, Global Channel and Aftermarket at Allison Transmission, this initiative reinforces Allison's position in sustainable transportation with its expensive portfolio of propulsion solutions, which incorporate fully electric axles, fuel-efficient conventional transmissions compatible with alternative fuels, and the eGen Flex electric hybrid system for transit vehicles.

The eGen Flex system gives transit agencies an efficient, low-emission option without sacrificing performance or reliability. It can run up to 50% of a bus route in engine-off mode, aiding emission reduction, especially in urban areas. The system uses geofencing to activate electric-only mode in designated areas, eliminating engine emissions and noise during passenger loading and unloading and while operating in predefined dense pedestrian areas and zero-emission zones.

Allison’s focus on advanced technology and continued innovation in product development augur well. FracTran, TerraTran and 3414 Regional Haul Series, fully automatic transmission, along with the development of products catering to electrification and fuel-cell markets for commercial vehicles, are opening new growth opportunities for the firm.

Allison’s eGen Power portfolio, comprising 100S, 100D, 130S, 85S and 130D e-axles, demonstrates its ability to adapt to the changing dynamics of the auto industry. In particular, the eGen Flex and eGen Force portfolios are driving Allison’s prospects. Also, Allison Ventures has committed to invest $10 million in EnerTech Capital, a firm focused on emerging mobility technologies. This partnership grants Allison access to EnerTech's network of high-tech companies in electrification, connectivity, autonomy and digitization.

Zacks Rank & Key Picks

ALSN currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space are Dorman Products, Inc. DORM and Douglas Dynamics, Inc. PLOW, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.71% and 35.46%, respectively. EPS estimates for 2024 and 2025 have improved 51 cents and 37 cents, respectively, in the past 60 days.

The Zacks Consensus Estimate for PLOW’s 2024 earnings suggests year-over-year growth of 60.4%. EPS estimates for 2024 have improved 15 cents in the past 60 days.