Outside of Pittsburgh, Pennsylvania, the electric transportation company Hyliion (HYLN) does things a little differently.
Rather than building complete electric trucks and tractor-trailers, Hyliion builds electrified powertrain systems that can augment or replace traditional ICE (internal combustion engine) powertrains in existing or new trucks. All Hyliion needs is the truck frame to bolt onto its system.
While the company is able to retrofit batteries and add a small electric motor to turn traditional trucks into hybrids with its Hybrid EX technology, it also produces the Hypertruck ERX, which replaces the entire powertrain of an ICE engine truck by an electric motor and a battery. system.
But there is a twist. The big change here is that renewable natural gas (RNG), which comes from organic waste emissions, powers a generator, which in turn charges the system batteries, which then powers the electric motor that drives the rear axle of the truck. .
Using RNG allows the truck to have a much longer range than an all-electric battery-powered truck, and it can be refueled at RNG service stations across North America. The system also allows around 75 miles of all-electric driving if needed. Hyliion is planning controlled fleet trials of the Hypertruck ERX later this year.
The process of rotating and changing larger truck fleets is critical to the business. “We’re targeting new trucks that fleets buy into their operations, and most fleets will renew about a quarter to a third of their trucks each year,” CEO Thomas Healy told Yahoo Finance Live. “So with some of these big fleets, some of the ones we work with, like the Schneiders (NRDS), the Werners (WERN) of the world, which operate thousands and thousands of vehicles, they will turn over thousands of trucks every year. »
Healy says that large fleet operators prefer the flexibility of a product like the Hypertruck ERX to all-electric options because although it is an electric vehicle, the Hypertruck ERX actually brings the power plant to edge of the truck, powered by a relatively cheap RNG – a big deal these days.
“Well, the great thing about what’s happening right now is that while we’re seeing diesel prices continue to climb, natural gas has stayed low. We have fleets buying natural gas at around $1 a gallon, whereas diesel I think we’re seeing north of $5 in some parts of this country,” Healy says. “When you look at a return on investment [return on investment]a return on investment in our product, that the higher price of diesel fuel even allows us to see a faster return on investment in our product. »
Although the overall payback is yet to come for Hyliion, Healy and investors are betting on a payoff within the next two years.
“As we move into the final part of 23, we’ll actually start shipping these units and recognizing revenue from them, and that’s really the system that we see as the game changer for this industry,” Healy says. “This industry is huge, 300,000 vehicles are produced every year, and our goal is really to be the dominant powertrain to bring electrification to the long-haul space.”