Cummins is making a big move in the electric vehicle space by acquiring Efficient Drivetrains Inc. (EDI), which produces hybrid and all-electric powertrains.

Cummins, headquartered in Columbus, Indiana, is a major supplier of diesel and natural gas engines for school buses.

EDI, based in California’s Silicon Valley, has already stepped into the school bus market, supplying powertrains for the forthcoming electric models from Blue Bird and Thomas Built Buses.

Cummins began developing its electrification capabilities about a decade ago. During the past nine months, the company has accelerated its investments in electric capabilities by acquiring U.K.-based Johnson Matthey Battery Systems and U.S.-based Brammo, which produces electric traction motors and traction batteries.

The pending acquisition of EDI will add fully electric and four-mode hybrid powertrains to Cummins’ wheelhouse.

“This acquisition will combine EDI’s talented workforce and electrification capabilities with Cummins’ expertise in developing and manufacturing the technologies that power the world,” said Tom Linebarger, chairman and CEO of Cummins Inc.

Joerg Ferchau, EDI’s chairman and CEO, added that as “the industry continues to evolve and OEMs move to include hybrid and electric technologies in their vehicle offerings, the combination of Cummins and EDI represents a tremendous opportunity for growth and category leadership.”

The acquisition is expected to close in the third quarter of this year.