Hyliion's CEO On Choosing Natural Gas Power, Beating Tesla, Nikola With Infrastructure

In the middle of a red-hot month for alternative energy companies, powertrain developer Hyliion is merging with special purpose acquisition company Tortoise Acquisition Group SHLL to develop renewable natural gas as the dominant fuel source for trucking.

The plan is simple: leverage existing infrastructure and partners to beat competitors to market.

Becoming The Early Bird: Time is the primary factor in Hyliion's pursuit of a relationship with Tortoise, CEO Thomas Healy told Benzinga.

With enough cash in its pocket to kickstart its campaign, Hyliion hopes to put its powertrains on trucks and prove its business plan far ahead of competitors like Tesla TSLA and Nikola NKLA.

While Nikola took the same route to a faster IPO, the company inevitably has work to do to build the fueling stations and trucks necessary to carry out its vision, the CEO said. Hyliion does not face a problem on that large of a scale.

Benzinga spoke with Healy about the company’s decision to accelerate its go-to-market strategy.

BZ: Why was pursuing a reverse merger suitable for Hyliion's needs?

Healy: We valued the amount of capital we would be able to bring in that would fully fund our business plan, which puts us in a position where we do not have to go out to raise more capital in the future. So that is a huge benefit.

Also, as we look at our positioning in the industry, as we are building our relationships with existing truck manufacturers and suppliers, being a publicly-traded company allows for more transparency within the industry and allows for people to have more confidence in what we are doing.

We are saying, “yes, we are a company that is here. We are not going away and we are going to have a big impact on this industry.”

BZ: What was the philosophy on choosing natural gas?

Healy: There are three factors that drive the pros and cons of each fueling solution: cost of operation, emissions levels and infrastructure. In our public filing, we did a comparison of natural gas versus hydrogen versus electric costs, and natural gas is by far the least expensive solution.

We also found that renewable natural gas is the only fuel source that allows us to get to a net carbon negative emissions profile.

With hydrogen and battery electric options, you can get to zero emissions if you use purely wind and solar as your fuel source, but with our renewable natural gas process, we actually get a negative emissions profile, which is huge from a climate change standpoint.

Regarding infrastructure, there are over 700 natural gas stations already across the U.S. specifically for Class 8 trucks. With hydrogen and battery electric options, the trucking infrastructure has not been built out yet.

We have a leg up of not trying to take the capital we just raised and go build stations. We are going to leverage existing stations that are already out there and use them with our vehicles.

BZ: What strategy is Hyliion adopting to beat competitors to the market?

Healy: While we are focusing on the powertrain, we are not trying to reinvent the entire truck. The approach that Tesla and Nikola are taking is that they are not only reinventing the powertrains, but they are building their full vehicles from the ground up.

And so with our approach, there are less barriers and hurdles that we need to overcome. What we have done is take more of the approach that Cummins CMI has taken with the industry, which is to stay focused on the powertrain and then supply those powertrains to all the existing OEMs.

When you ask questions like “how are you going to design the vehicle?” and “what safety and crash testing do you need to go through?” as well as think about warranties and recalls, we are piggybacking on what the OEMs have already done.

We are coming in with that new powertrain, which will allow for a quicker adoption cycle to impact the market.

Photo courtesy of Hyliion. 

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