Electric trucking company Hyliion reported mixed Q2 earnings, with revenue falling short of analyst expectations. Thomas Healy, Founder & CEO, Hyliion, joined Cheddar News to discuss how the company is electrifying the shipping and logistics industry.


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Hyliion CEO Talks Electrifying Trucking Industry

for more on this, let's bring in thomas Healy founder and ceo of highly on joining us now thomas before we get into the latest earnings report. Can you just walk us through what highly on offers and how the company believes it's revolutionizing the trucking industry. Absolutely. So and it all starts with electrifying the trucking space. This is one of the greatest polluters that we see globally is the big semi trucks you see going down the highway. And so our approach is let's make them electric, let's make them cleaner for the planet. But we're specifically actually going after the long haul trucking space. So those trucks that are driving 5 600 miles every day, which is arguably the toughest sector to actually electrify. So the way we do it is we actually bring a generator on board the vehicle and charge the batteries as you drive. So we can leverage fuels like hydrogen, like natural gas to be able to get over 1000 miles of range out of one of these trucks to be able to get the goods that all of us by on a daily basis across the country. It certainly sounds amazing but what's the actual timeline for bringing the trucks to the road. So as you mentioned, we we did have revenue this past quarter. We actually have a product we're already shipping today. It's our hybrid system. We have some of the largest fleets in the U. S. Already running this system but then our backbone product is our hyper truck er X. This is the full electric range extender vehicle that I was mentioning in the lead in that technology will be coming to market in late 23 from a startup production standpoint, but later this year and into next year we'll be doing fleet trials. As we mentioned on our earnings call, we actually made our first delivery of freight with these trucks in normal operation with one of our partner fleets, Green Path Logistics and we made a delivery to one of the largest retail stores in the US. So the trucks are already starting to get utilized for moving freight. Speaking of this quarter, there was revenue, it was slightly under what the expectation was and there was a post of net loss in the quarter, as you guys get off the ground, what are some of the biggest challenges or headwinds the business is facing right now? Sure. So the biggest thing is obviously supply chain challenges and highly on is by no means the only company facing this, I think that's across the board, everyone is coming out in their earnings talking about supply issues. That's why one of the big reasons we saw miss and our revenue targets for this past quarter, but we were able to reiterate a full year target that we were on track there. So supply chain, but I'd say, you know, the other big headwind that this industry as a whole is facing is there has been a massive pullback and tech stocks and specifically e V tech stocks and uh, and we've seen that as well in highly on share price and ultimately, you know, as we look at where we're positioned, we've got 500 million in cash sitting on our balance sheet. And so we see that we're really destined to be able to become one of the winners out of this segment versus you know, in the months and years ahead. Here. We see either consolidation, mergers, potentially even bankruptcies happening with some of the tv players that are out there today. And speaking of becoming one of the winners, I think the reality is that the E. S. G. Story here is pretty significant and pretty important, right? As you mentioned, when we look at fright movement that accounts for such a significant amount of transportation emissions, how dramatically could highly on, you know, decreased level of emissions that that we're seeing in the logistics and shipping industry so pretty staggeringly. Uh, and it's a tough one to wrap your head around, but we can actually be net carbon negative. So that means it's actually cleaner for the environment to drive our trucks than to not drive them. And the the way we're able to do that is we can actually use renewable natural gas to fuel our battery packs. And so what that is, is actually basically taking pollution pollution that would have normally come from dairy farms or wastewater treatment plants and we can actually use that as a fuel on board our vehicle to charge the battery pack and that actually means it's better for the environment because we were basically using what would have been pollution to actually charge the batteries. And I guess in the same vein of importance here in the long term, because I know in the short term and in the entry kind of cost that they can be pretty substantial. How does this help decrease cost long term in the shipping industry? Yes, that's another big differentiator for us is we realize that fleets need to see an operating cost. That makes sense for them. You know, they're used to using diesel fuel today. Well, we've seen diesel go up significantly. Many fleets are spending around $5 a gallon right now with our solution using renewable natural gas, charge the batteries. Fleets are sourcing natural gas at about a dollar per gallon right now. So that's a significant reduction in operating costs. But one of the other big things fleets need to overcome is the upfront vehicle cost. And one of the things that we also spoke about on our earnings call was the new inflation reduction act. And it looks like our vehicles will be able to qualify for a 30% tax credit up to $40,000 in reduction of of upfront vehicle cost purchase. That's pretty significant. And I was actually gonna ask you that is my next question, but I'll skip to this then when you're looking at this space and you're looking at competition, I think of a name. Tesla. Tesla's long awaited, Excuse me. Semi truck is expected to start shipping this year. How does Hi Leon compete with the likes of an industry giant like that? Yeah. So the first is, I want to clarify, we're so we're doing the same semi trucks like these big 18 million to see, but Tesla's approaches that are going to plug into the grid to recharge their vehicle. Our approach is we're going to use a fuel on board the vehicle on board the truck in order to recharge the batteries. And so what that means is we can tap into already existing infrastructure that's out there over 700 stations versus Tesla. There is no infrastructure set up for B E V plug in vehicles right now for semi trucks, there's plenty for passenger cars. But these trucks require a ton more electricity. And so we see that as a big differentiation for us because we leverage existing infrastructure, We have a total cost of ownership. That's fantastic when you compared to a diesel truck or even to a B E V. And uh, and that's what fleets are ultimately going to care about when they're going and adopting a solution like Highlands and really quickly here. How unique is that system that you have on board in terms of competitors in this space. So there are some other players out there that are focusing on hydrogen fuel cell vehicles. And while we have that on our road map, we see the right path is to actually start with renewable natural gas today and then evolved into a hydrogen based future down the road. So we're one of the only ones doing a natural gas range extender vehicle and we're seeing tremendous fleet interest in it. And that's why we've already got the 1st 200 production slots booked thomas. Really interesting stuff. Thanks for your time and your insight, thomas, healey founder and Ceo of highly on.