Startup electric driveline maker Hyliion Holdings Corp. (NYSE: HYLN) reported a $9.1 million third-quarter loss in its first earnings report as a public company. It decided against booking $1 million in revenue from the first 20 trucks equipped with its hybrid electric system.
Remaining a pre-revenue company is not a big deal for Hyliion. Wall Street has no expectations for it to sell much or report significant profits until 2023. A more meaningful way to judge the Austin, Texas-based company is how it performs against its milestones, CEO Thomas Healy said. Those include:
- Delivering 20 trucks equipped with its electronic-axle system that boosts hill-climbing power and generates electricity for cooling or heating the truck cab. Hyliion has delivered 13 of the trucks, including eight trucks to four fleet operators between July and September. The remaining seven systems will be installed on trucks by the end of the year, Healy said.
- Staying on track to deliver customer test versions of its ERX Hypertruck system in the second half of 2021 followed by regular production in 2022.
“We are experiencing strong interest for our solutions and are utilizing our resources to develop a scaled infrastructure that will be able to support demand from this $800 billion market,” Healy said in a press release.
Negative net-zero emissions
The Hypertruck ERX uses an onboard natural gas-fueled generator to charge batteries which power an electric motor. The E-Motor then drives rear axles and captures energy through regenerative braking. Hyliion has 1,500 pre-orders for the system. It plans to use renewable natural gas (RNG) as the fuel source for the generator.
Renewable natural gas is not a fossil fuel. It comes from food waste and other biogas products like methane. That allows the ERX to emit negative net-zero emissions when running on RNG.
This is a big deal in states like California. The state is aggressively trying to rid its highways of diesel-powered trucks to curb planet-warming greenhouse gas emissions.
The California Air Resources Board (CARB) said Thursday the energy-weighted carbon intensity value of natural gas vehicles under the state’s Low Carbon Fuel Standard registered negative net zero for the first time.
Hyliion is working on a hydrogen generator that could operate in place of its natural gas generator “when the industry is ready.” But wide adoption of fuel cells in heavy-duty trucking is several decades away.
“Potential customers are telling us that hydrogen solutions are simply too cost-prohibitive today,” Healy said on a conference call with analysts.
Healy started Hyliion in 2015 . It raised $50 million in four years. In October, the company completed a reverse merger with special purpose acquisition company Tortoise Acquisition Corp. It received $520 million after expenses of the $560 million raised to fund its business plan.
If all warrants for new stock granted to purchasers of discounted Tortoise Acquisition shares are exercised, Hyliion would add $140 million cash to its balance sheet.
During the quarter, Hyliion signed a deal with FEV North America Inc. to speed commercialization of the Hypertruck ERX. FEV has the key testing equipment to help Hyliion prove out its powertrains. They can be adapted to Class 8 trucks from all major manufacturers.
Hyliion also struck a deal with American Natural Gas (ANG) to build additional infrastructure and sell discounted renewable natural gas to Hyliion customers.
ANG pre-ordered up to 250 Hyliion natural gas-powered HyperTruck ERX electric systems. It will build new natural gas stations for qualifying Hyliion customers near their locations with no customer-paid upfront costs.
Locking in a no-cost infrastructure expansion for compressed and renewable natural gas is an advantage for Hyliion. Battery-electric and hydrogen fuel cell electric truck makers need to build out charging and hydrogen filling stations.
“Our strategy has been to leverage external resources where appropriate,” Healy said.