Hyliion Reviewing Electric Powertrain Business Options
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Hyliion Holdings Corp. is reviewing the options for its electric powertrain business, including selling the unit, the original equipment manufacturer said, citing a need to raise more funds as costs rise.
Austin, Texas-based Hyliion engaged strategic advisers to analyze the company’s options as fleet owners’ appetite for sleeper models with an electric powertrain developed less quickly than previously anticipated, it said Oct. 10.
The company intends to complete the assembly of initial production trucks and continue demonstrating Hyliion products in extended fleet trials as the review is carried out, it said.
But some work is set to be paused, including securing orders for Hypertruck ERX-equipped trucks and new powertrain development work, Hyliion said.
Hypertruck ERX trucks are on display at American Trucking Associations’ Management Conference & Exhibition in Austin, where ride-and-drive sessions were offered.
The Hypertruck ERX is an electric powertrain available for a Peterbilt Model 579 sleeper cab. Hyliion also offers a retrofitted Class 8 electric hybrid powertrain.
With the receipt of California Air Resources Board certification and the start of trials with fleets, Hyliion has completed all the milestones on the path to Hypertruck ERX commercialization, the company said.
Peterson
That certification makes the unit potentially valuable to truck OEMs or powertrain OEMs to consider making a bid for, JP Morgan analyst Bill Peterson said in an Oct. 11 research note.
Hyliion is seeing slower-than-anticipated market adoption as fleets undertake the gradual transition to electric trucks, it said.
The company’s ongoing participation in truck electrification “will require continued investment, while addressing escalating component and production costs, meeting ongoing regulatory requirements, and aligning with a new CARB mandate for fleet adoption of electric trucks,” it said.
Healy by John Sommers II for Transport Topics
“While Hyliion’s capital position is currently strong, its proprietary technology is transformative, and commercialization is progressing on track, additional future capital will ultimately need to be raised against the backdrop of uncertain market conditions if we continue on our current trajectory,” noted CEO Thomas Healy.
The decision was not a surprise, JP Morgan’s Peterson said. “We think this decision makes sense given challenging market conditions and inflationary pressures, high capital intensity of building trucks with an initially unfavorable cost structure, and limited liquidity to support development through profitability,” said Peterson.
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“This market view is also in line with our prior research in which [we] have discussed how decarbonizing transportation was/is taking longer than expected, with [battery-electric vehicle], [fuel cell electric vehicle], and natural gas trucks all being adopted at a much slower-than-anticipated pace relative to [special purpose acquisition company]-era expectations due to limited affordability and infrastructure,” he added.
Hyliion will continue commercialization of the fuel-agnostic KARNO stationary generator, which the company believes can compete effectively in that market. The Karno operations are not affected by the review.
“Given the rising strain on electrical infrastructure, notably from electric vehicles, the KARNO generator is positioned well to address these challenges,” the company said.
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