Cummins Inc., whose size and resources threatened the survival of hybrid powertrain maker Hyliion Holdings, will partner with the startup to certify its 12-liter natural gas engine for the Hypertruck ERX, the companies said Tuesday.
The collaboration is a big deal for Hyliion, which went public via SPAC in October 2020. Its stock price topped $55 a share before the business combination with sponsor Tortoise Acquisition Corp. Like most transportation SPACs, it’s share price is under pressure. But with $527 million on its balance sheet at the end of the first quarter, Hyliion (NYSE: HYLN) is in better shape than many.
Hyliion traded intraday Tuesday at $3.50, down 14 cents from Monday’s close.
“Cummins is a large, large player in this space and has a tremendous amount of credibility and confidence from fleets,” founder and CEO Thomas Healy told FreightWaves on Tuesday. “So, all across the board this helps Hyliion.”
Cummins (NYSE: CMI) is the main provider of natural gas-powered engines to truck manufacturers. It will begin selling a 15-liter natural gas engine for over-the-road Class 8 trucks in 2024.
Hyliion is already using Cummins’ 12-liter natural gas engine in the ERX in fleet demonstrations. Hyliion has scores of orders for the hybrid powertrain secured by deposits. Production for the Hypertruck ERX with the ISX12N Cummins natural gas engine is expected to begin in late 2023.
Hyliion expects ‘far, far easier’ certification
Getting the engine certified in the ERX makes it eligible for three-quarters of a zero-emissions credit from the California Air Resources Board. That matches the 75 miles of pure electric range the ERX can travel before the natural gas generator — the Cummins’ 12-liter engine — kicks in.
“Natural gas solutions are an integral part of our journey towards zero emissions,” J. Michael Taylor, Cummins’ general manager, Global Powertrain Integration, said in a Hyliion press release.
“Integrating our engine with the Hyliion Hypertruck ERX solution is key to offering our customers a portfolio of powertrains across many fuel options to meet their sustainability goals.”
The ERX also would qualify for a 100% credit under a pending California rule requiring fleets to purchase zero-emission trucks.
“Doing [the certification] together is far, far easier than if Hyliion was trying to go at it alone,” Healy said. “It also shows that Cummins is supporting the path that we’re on and is eager to make sure Hyliion is successful as well, which obviously is a good thing.”
Hyliion draws closer to Cummins through Meritor ties
The collaboration with Cummins and the Columbus, Indiana-based engine maker’s pending $3.7 billion acquisition of Meritor Inc. draws Hyliion closer to Cummins, which has not financially invested in Hyliion. Meritor’s former CEO and chairman Jay Craig is a Hyliion director. Several top Hyliion managers formerly worked for Meritor.
“From our end, hopefully this is the start to a long relationship with Cummins,” Healy said. “I think we’re both working on interesting road maps.”
One of those is the use of hydrogen fuel to power an internal combustion engine. Cummins is testing the 15-liter hydrogen powertrain with Werner Enterprises (NASDAQ: WERN) and has a dozen other fleets working with it under nondisclosure agreements. The engine is targeted for sale in 2027.
Cummins hydrogen engine could be a fit for Hyliion
Hyliion plans to offer either a hydrogen fuel cell or another form of hydrogen later. Could it be a candidate for Cummins’ hydrogen ICE planned for 2027?
“I wouldn’t rule anything out at this stage,” Healy said. “We’ve been following closely what Cummins has put out publicly around the hydrogen side of things. It could be a path for us. We want to move into hydrogen when the time is right. And there are possibilities that Cummins could be supplying those.”
The 15-liter natural gas engine from Cummins threatens the future of the Hyliion Hybrid, the company’s bolt-on electric boost for diesel and natural gas engines. Healy said Hyliion is evaluating the future of theHybrid because Cummins’ 15-liter engine features power and torque numbers comparable to a diesel powertrain.
That makes up for the diminished power associated with running on natural gas, a main selling point of the Hybrid.