Hyliion (HYLN) Aims to Modernize the Trucking Industry; the World's #1 Polluter | Best SPAC in 2020


The Problem:

The trucking industry is essential to the movement of goods and services from our port terminal infrastructure and warehouses across this country.  It will continue its prominence in shipping and logistics for many years to come.  Since the cost effective diesel engine was invented in the late 1890's its place in history will be forever remembered as the low cost solution that powered the transportation industry for all of the previous century.  I'm sure in the late 1800's the focus through innovation was centered around cost and efficiency; the diesel engine was the solution for both.  How much of the conversation was centered around green house gas emissions (GHG)? Global warming? Pollution?  Now, I'm not looking to spark up a political debate over these issues as you'd probably be encouraged to know I'm slightly pragmatic on both sides of the debate where I presume a well crafted initiative to reduce GHG and facilitate enterprise at the same time would be more in line with where the masses reside on this issue.  Let me just also say that I don't believe our shipping and logistics companies operate out of sheer malice or a complete disregard for the size and magnitude of their carbon footprint.  This problem didn't just manifest itself over night and I don't mean to suggest that a solution is easily obtainable over night either.  The ability to unwind the damage done to the environment will require the participation of all countries worldwide and the ability to accept new technologies as they emerge and integrate new solutions resulting in not only a cleaner transportation industry but a smarter transportation industry.

The "HYBRID" Solutions:

Austin Texas based, Hyliion (HYLN) now trades on the NYSE after successful completion of its Special Purpose Acquisition Company or (SPAC) merger with Tortoise Acquisition Corp. in late September 2020.  

The best source for information on Hyliion can be found by reviewing their Investor Presentation.  Contained within the document Hyliion makes a compelling case on how the "HYBRID" solutions may just be the answer to our 120 year old pollution problem.  Remember how I gave appropriate concession to shipping companies not wanting to maliciously harm the planet?  I equally believe they would also like to avoid going bankrupt through an ill-advised or forced integration of the wrong "green" solution.  Since many of the early development stage electric solutions (battery electric, fuel cell) now aren't available for immediate integration to customers and the costs surrounding mass scale infrastructure projects still loom large, the freight-liners remain in a "show me" state of readiness, until now.  It's also important to note that the freight line and logistics companies have attempted with no real marked progress to engage with the right company that adequately acknowledges both the cost benefit to deploy to scale and the logistic efficiency of a potential solution. 

The purpose of this article isn't to regurgitate whats already been linked for you in the Investor Presentation or referenced in the SEC filings nor is it to influence the direction of the stock with my bias rhetoric.  My purpose is to deliver an impartial introduction to this new and exciting company that may have the solution designed not to re-invent the trucking industry rather integrate with it. Here is the most recent interview conducted by JMAC Investing with Hyliion's CEO, Mr. Thomas Healy:


The HYBRID diesel solution based on my independent self study of the company, is simply a retro-fit (replacement) or new install of the rear axel and installation of the Hyliion's proprietary battery system.  The Hybrid diesel solution is compatible with and available for immediate integration with all existing Original Equipment Manufacturers (OEM's) for new installation and retro-fitting and replacement of the existing rear axel of class 8 chassis.  I consider this a range extender by using the mechanical energy created by the rear axel (normally wasted) and re-directing the energy to charge the onboard battery bank to be re-used as a stored source of power when needed.  The immediate integration of Hyliion's hybrid diesel system lowers the total overall cost of ownership by reducing fuel cost and increases potential payload capability.  Basically, the truck uses the mechanical energy created to power itself; brilliant. 

Some of the criticisms of the diesel solution centers around durability and necessity. Both criticisms are valid and are not all inclusive.  Hyliion does sport a 2 million road mile pilot that has performed very well but in reality, setbacks and constructive feedback from customers are inevitable and it will be imperative for Hyliion to promptly respond as it looks to integrate process improvements into their business model and leverage data provided by customers and data gathered through their proprietary technology to satisfy the current demands on the new generation of shipper.  So why don't companies like Cummins and Volvo just build their own system?  In a recent article Dana Logistics, a partner of Hyliion addressed this question.  Established companies do what they do and they do it well.  They would love to pursue every R&D project and every process improvement initiative that comes around.  The fact is, partnering is easier.  Dana also expressed not only an interest in the "nuts and bolts" approach to Hyliion's onboard integrated solutions package but was more intrigued at the proprietary technology which stores the data real time in the cloud which can be used to deploy a "smarter truck."  What does the terrain look like?  How will forecasted weather and road conditions impact the efficiency of the vehicle. See, Dana understands that in a capital intensive business, pennies matter; so does data.  So the idea that the majors will re-invent the wheel, I mean solutions, and look to challenge the 30 existing Hyliion owned patents may be possibility albeit unlikely.  Even if they did look to provide a competitive solution from scratch the addressable market upon last count was 800 billion, which leaves plenty of room for everyone in the electric vehicle space.

HYLIION Additional Information:

I'll be releasing follow on articles on Hyliion in the near future on the CNG Solution and the the Hypertruck ERX!  Please subscribe to my Blog!



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