Hyliion’s secret sauce isn’t electricity, it’s managing its use

Hyliion Holdings Corp. (NYSE: HYLN) points to natural gas fueling the on-board generator that makes electricity to power heavy-duty hybrid trucks. But the real mojo is unseen algorithms that manage the power for better fuel efficiency.

So even as Dana Inc. (NYSE: DAN) delivers the electric driveline that is the heart of the hybrid powertrain, it’s what happens afterward that Hyliion CEO Thomas Healy thinks will drive the newly public company’s business.

“One of the real value adds is how do you drive better efficiency by leveraging data and analytics off the vehicle as opposed to just having an electric system,” Healy told FreightWaves in an Oct. 2 interview. “It’s kind of a controls algorithm that goes behind it.

“We’re constantly sending that information up to the cloud and monitoring the vehicle in real time. And then we’re able to supply that directly to the fleets,” Healy said.

Better fuel economy reduces total cost of ownership and drives purchase decisions. “We’re doing the system integration and all of the software that goes around it,” he said.

Getting in early

Dana got in early as an investor and technology partner with Hyliion because it saw potential.

“We went through a lot of analysis with them, and a lot of the software value that they bring to the table,” Ryan Laskey, Dana senior vice president of commercial vehicle drive and motion systems, told FreightWaves. “That’s really where we viewed more of a partnership model with them than being [just] an investor. We felt we worked well together.

“They brought a lot of software competency. And we brought a lot of electromechanical systems competency and knowledge,” Laskey said.

The Maumee, Ohio-based Tier 1 supplier invested $15 million in Hyliion. It is worth much more despite a recent decline in Hyliion’s stock price. Dana cannot sell its shares for a year.

Dana Inc. says it is in for the long haul as a technology partner and investor in Hyliion Holdings Corp., the maker of diesel-electric hybrid systems for Class 8 trucks.

“We are definitely in this for the long haul,” Laskey said. “We view this as a solution that we can offer our long-haul customers because we think their systems paired with our motors, inverters and e-axles can meet our customers’ immediate needs for fuel efficiency.”

Why not go it alone?

With 36,000 employees around the globe, couldn’t Dana do the whole system itself?

“Our investment thesis was around the Hyliion software being able to read terrain and optimize the batteries on a truck to really maximize fuel economy,” Laskey said. “We try to get into as many areas as we can. But we’re not going to be experts in every area.”

Laskey met Healy about four years ago when Hyliion was looking for someone to make the propulsion system for its hybrid. Dana’s electronic axle is the heart of Hyliion’s current diesel-electric hybrid. It is producing the electric drive system that will be paired with a natural gas generator on Hyliion’s HyperTruck ERX. Customer deliveries begin in late 2021. 

“I’ve watched him grow the company,” Laskey said. “And I’m really proud of him.”

At 28, Healy became the nation’s youngest billionaire on paper when Hyliion began public trading Oct. 2. The 5-year-old startup completed a reverse merger with special purpose acquisition company Tortoise Acquisition Corp. on Sept. 28.

Electronic axle overcomes downsides of natural gas

Though its first product is focused on diesel hybrids, Hyliion is also overcoming the lower-power-for-fuel-economy tradeoff of natural gas trucks.

Natural gas-powered vehicles produce lower carbon monoxide, nitrogen oxide and emit fewer greenhouse gas emissions. They cost more up front than diesel-powered trucks, which is offset by fuel savings over the life of the vehicle.

“On average, we’re seeing a 65% percent savings on fuel costs per truck when using natural gas. And we expect to keep the trucks in service longer – seven to 10 years, compared to five years for a diesel,” northeast U.S. grocery chain Wegman’s wrote in a September blog on its website.

The tandem-pulling challenge

The lower horsepower and torque of their first-generation CNG trucks prevented Wegman’s from pulling tandem trailers. Hyliion retrofitted one of Wegman’s newer CNG trucks with a Dana e-axle. The Volvo tractor now routinely pulls two trailers.

“Until now, we could only use diesel trucks to pull tandem sets,” said Matt Harris, Wegmans fleet maintenance department manager. Wegmans began working with Hyliion in 2018. “With this one hybrid-electric CNG truck, we’ve flipped that on its head.”   

Hyliion’s first 20 hybrid trucks are now in customer possession. The Wegmans experience is a precursor to the HyperTruck ERX.

“I think it’s kind of that ‘aha’ moment where the downsides with natural gas are overcome because of the electric powertrains,” Healy said.

Longer-life batteries

Hyliion will use lithium-titanate (LTO) based chemistry from Toshiba for the HyperTruck ERX  batteries. LTO batteries charge faster than more commonly used lithium-ion batteries. But they are less energy-dense. Hyliion accepts that trade-off because a single LTO battery might last the life of the truck.

“Maintenance is everything to these fleets,” Healy said. “One of the things you’ll see is longer life out of the electric truck.”

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