Editor’s Note: Updates throughout with comments from earnings call and closing stock price
Hyliion Holdings reported the first revenue in its young public life and said it took 100 orders with deposits for its extended-range Hypertruck ERX that runs on natural gas and electricity. It took another 325 nonbinding reservations, bringing the total to 2,000.
The $200,000 in revenue was about a fifth of what analysts expected. Shortages due to the ongoing supply chain crisis pushed some deliveries of Hyliion’s first product, the electric power-boosting Hybrid eX, into the current quarter.
The Cedar Park, Texas-based startup said the $557 million on its balance sheet, including $258.4 million in cash and cash equivalents, is sufficient to get through launch in Q4 2023. It had $600 million at the end of the third quarter, mostly from proceeds of its merger with Tortoise Acquisition Corp., a special purpose acquisition company, in October 2020.
Watch now: Cummins, Meritor and Hyliion, oh my
The company projected full-year 2022 revenue of $2 million to $3 million from sales of 100 units of its eX hybrid system to 100 trucks this year. Total operating expenses are expected to range from $135 million to $145 million for commercialization of the eX and the serial hybrid Hypertruck ERX.
Capital expenditures will be minimal – $10 million to $20 million this year to finish a headquarters expansion and build out a test lab. Hyliion has an asset light approach. It can equip a few trucks at a time on site but will use modification centers for most production with hope to get OEMs to install the ERX system on their production lines, CFO Sheri Baker said on the call.
“We do not anticipate that we are going to have to raise any additional capital at this time,” she said. “It will depend on the ramp up of the Hypertruck,through we are incredibly encouraged by the recent order announcement. We’re looking forward to hopefully announcing more orders in the near future.”
The first order from one of Hyliion’s innovation council, lostly comprised of large fleets, was received on Wednesday, Healy said, declining to provide details.
Hyliion shares closed 15.73% higher Thursday at $4.12.
Pressing its case
Hyliion (NYSE: HYLN) is pressing the case that the Hypertruck ERX, powered by a natural gas generator that creates electricity for up to 75 miles of zero-emissions electric driving with a total range of 1,000 miles, is a better alternative to plug-in electric trucks capable of 100 to 200 miles before needing to be recharged.
“We have received overwhelmingly positive feedback from fleets regarding the Hypertruck ERX’s performance and drivability,” Dennis Gallagher, Hyliion’s chief operating officer, said in a press release. “Fleets have also shared examples of how the Hypertruck ERX technology addresses infrastructure hurdles and range anxiety associated with plug-in electric trucks.”
Natural gas as a generator fuel for the HyperTruck ERX is not a long-term solution, CEO Thomas Healy said on a call with analysts.
“Hyliion is well positioned to evolve with the market into hydrogen solutions as the refueling infrastructure is built. We have already begun efforts on both fuel agnostic and hydrogen fuel cell solutions. When hydrogen becomes available out powertrain is the logical solution to use because we’ll already have millions and millions of miles deployed on natural gas.”
The Cummins take
Speculation around Hyliion’s future arose this week when Cummins Inc. (NYSE: CMI) announced a $3.7 billion cash purchase of Tier 1 supplier Meritor Inc. (NYSE: MTOR) Former Meritor CEO Jay Craig joined Hyliion’s board of directors this month, and the company has hired Cheri Lantz as chief strategy officer, a role she previously held at Meritor.
Cummins said one of its key reasons for purchasing Meritor was to gain access to its electronic axle technology, which Hyliion uses on the ERX.
“We did have discussions with Cummins as to whether this was going to have any impact on the supply chain for Hyliion, and we were assured it would not,” Healy said. “We’ve got a strong collaborative working relationship with Cummins and we plan to continue to carry that forward.”
Amy Davis, the president of Cummins New Power business, where Meritor’s axle technology will reside within the $24 billion company, told FreightWaves the Hyliion technology is “interesting” but probably a bridge technology to full electrification.
“I think that we should be looking at every way to get some decarbonization now,” she said. “What I think though is the costs quickly won’t add up because of the amount of extra batteries that you need to add. As battery prices come down, the question is how long is that going to be commercially better than a full battery electric or a fuel cell electric?
“I think it’s an interesting bridge though. I love all the bridge technologies. But I think it’s like a window.”
Cummins also could be helping to close the window on the eX Hybrid,. Cummins will begin producing and selling a 15-liter natural gas engine in the U.S. in 2024. While natural gas provides less torque than diesel, the new engine claims up to 500 horsepower and 1,850 pounds of torque.
“We believe the market opportunity for the hybrid eX product has been reduced given the anticipation of other fully electric products coming to market in the near term,” Healy said.