Startup electric powertrain manufacturer, Hyliion Holdings Corp. (NYSE: HYLN), reported a loss of $ 9.1 million for the third quarter in its first earnings report as a public company. It chose not to post $ 1 million in sales on the first 20 trucks equipped with its hybrid electric system.

Remaining a pre-revenue company isn’t a big deal for Hyliion. Wall Street has no expectations that it will sell a lot or show significant profits through 2023. A more meaningful way to gauge the Austin, Texas-based company is performance against its milestones, said CEO Thomas Healy. This includes:

  • Delivery of 20 trucks with an electronic axle system that increases mountaineering performance and generates electricity for cooling or heating the truck cab. Hyliion delivered 13 of the trucks between July and September, including eight trucks to four fleet operators. The remaining seven systems will be installed on trucks by the end of the year, Healy said.
  • Stay on track to ship customer trials of its ERX Hypertruck system in the second half of 2021, followed by regular production in 2022.

“We have great interest in our solutions and are using our resources to develop a scaled infrastructure that can support demand from this $ 800 billion market,” Healy said in a press release.

Negative net zero emissions

The Hypertruck ERX uses an integrated natural gas generator to charge batteries that power an electric motor. The electric motor then drives the rear axles and collects energy through regenerative braking. Hyliion has 1,500 pre-orders for the system. It is planned 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. This allows the ERX to emit negative net zero emissions when operated with RNG.

This is a big deal in states like California. The state is aggressively trying to rid its highways of diesel-powered trucks in an effort to curb greenhouse gas emissions that are warming the planet.

The California Air Resources Board (CARB) announced Thursday that the energy-weighted carbon intensity value of natural gas vehicles under the state’s low-carbon fuel standard posted a negative net zero for the first time.

Hyliion is working on a hydrogen generator that could run in place of its natural gas generator “when the industry is ready”. However, the widespread acceptance of fuel cells in heavy goods traffic is several decades away.

“Potential customers tell us that hydrogen solutions are just too expensive today,” Healy said in a conference call with analysts.

SPAC reinforced start

Healy launched Hyliion in 2015. It raised $ 50 million over four years. In October, the company completed a reverse merger with the special purpose vehicle Acquisition Company Tortoise Acquisition Corp. from. It received $ 520 million after $ 560 million in expenses raised to fund its business plan.

If all of the new stock warrants granted to buyers of Discounted Tortoise Acquisition stock are exercised, Hyliion would add $ 140 million in cash to its balance sheet.

Make a bargain

During the quarter, Hyliion signed a contract with FEV North America Inc. to expedite the commercialization of the Hypertruck ERX. FEV has the most important test equipment with which Hyliion can prove its powertrains. They can be adapted to Class 8 trucks from all major manufacturers.

Hyliion has also signed a contract with American Natural Gas (ANG) to build additional infrastructure and sell discounted renewable natural gas to Hyliion customers.

ANG has pre-ordered up to 250 natural gas-powered HyperTruck ERX electrical systems from Hyliion. New natural gas filling stations for qualified Hyliion customers will be built near their locations with no upfront costs paid by the customer.

A free expansion of the infrastructure for compressed and renewable natural gas is advantageous for Hyliion. Manufacturers of battery electric and hydrogen fuel cell electric vehicles need to build charging and hydrogen filling stations.

“Our strategy was to use external resources when necessary,” said Healy.

Hyliion finds partners for the construction of natural gas filling stations

SPAC voters agree to merge to make Hyliion public

Hyliion CEO: Natural gas key to the future of the electric vehicle

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