Hyliion Holdings, a startup hybrid powertrain manufacturer, has postponed it’s Class 8 natural gas/electric Hypertruck ERX by a year, and a new natural gas engine from Cummins Inc. casts doubt on Hyliion’s existing offering, a power-boosting hybrid add-on.
Both developments, which were influenced by the supply chain crisis, resulted in a double-digit intraday drop in Hyliion’s stock as analysts questioned founder and CEO Thomas Healy about possible responses.
While Healy was frank during a Q3 earnings call on Wednesday, he offered no solutions to supply chain problems that plague considerably more seasoned firms.
Truck delivery has been delayed.
“One of the consequences has been significantly longer lead times for ordering new trucks. “If a vehicle is ordered today from an OEM, the delivery date is currently scheduled for 2023,” Healy added.
“We are striving to secure supply for the 2023 calendar year,” Healy said, adding that Hyliion (NYSE: HYLN) has built slots with Peterbilt secured in for 2022.
At Hyliion’s headquarters in Austin, Texas, some Model 579 chassis are missing parts and have been grounded. In the early half of next year, Hyliion will use completed Hypertruck ERX as fleet demo units.
Trucks scheduled to arrive in the second half of the year will be used for design verification and all-season testing. Before production begins in 2023, Hyliion aims to test some company-owned ERX vehicles with Green Path Logistics in Dallas to help develop 1 million miles of real-world utilization. It also has a nonbinding reservation with Mone Transport for 40 Hypertruck ERX.
“We intended to start winter testing of our ERX production-intent design in Q1 2022,” Healy stated. “Due to the late arrival of components, we won’t be able to start testing until the first months of the next winter.”
“As we found with our hybrid vehicle, testing the product in all seasons is crucial, particularly in the hard winter circumstances that many of our potential fleet customers encounter.”
The future of hybrid eX is questionable.
Hyliion delivered the first of its revised torque-boosting Hybrid eX trucks to Werner Enterprises in October, but Healy said the business is still evaluating how a 15-liter natural gas powerplant, which Cummins hopes to start offering in 2024, will affect the product.
The Cummins engine, which was first debuted in China earlier this year, has 500 horsepower and 1,850-pound feet of torque, answering a major driver gripe that natural gas trucks are underpowered.
Healy stated, “This will directly compete with our power-assist capabilities.” “On Hybrid eX, we’re evaluating the potential demand impact.” Another difficulty with the eX is that its advantages are limited to hilly terrain. The more powerful Cummins (NYSE: CMI) engine would most likely provide more horsepower and torque all of the time.
Hyliion’s intention to familiarize fleets with the Hyper truck ERX through months of demo runs is similar to the EX’s method.
“We feel that showing our product to fleets and allowing them to experience the benefits is the most effective method to drive interest in and orders for our product,” Healy added. “Most fleets want to get a feel for the good aspects of the powertrain before committing to a significant contractual order.”
According to CFO Sherri Baker, Hyliion intends to deploy a few Hybrid EX devices in Q4, but the revenue they generate will be insignificant. Because they can’t get new vehicles, some fleets that desire the hybrid have put their orders on hold.
According to the data, Hyliion lost $26.6 million in the third quarter, or 15 cents per share, compared to a loss of $9.1 million, or 10 cents, the previous quarter. It didn’t make any money. The company had more than $588 million in total liquidity at the end of the third quarter, including $289.5 million in cash and cash equivalents.
Baker wouldn’t say how much money Hyliion spends per month, but she did say that most R&D is concentrated on the ERX because the EX was mostly paid for in previous quarters.
Hyliion forecasts full-year operating expenses in 2021 to be between $110 million and $120 million, down from guidance of $130 million to $140 million, owing to the Hypertruck ERX’s truck chassis being delayed.
According to Securities and Exchange Commission records, Healy, Hyliion’s largest shareholder, has sold 600,000 of his more than 33 million shares in planned transactions in the last three months.
