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Hyliion Founder & CEO Thomas Healy joins Yahoo Finance Live to discuss companies like Wegmans and AB InBev testing the Hypertruck ERX and his outlook on the EV industry.
ZACK GUZMAN: Welcome back to Yahoo Finance Live. We've been covering a lot of these efforts to make transportation much more sustainable here. And those efforts are now hitting commercial trucks as well, not just through self-driving to try and relieve the drivers, but also the mechanics of the trucks themselves. We've been talking about electrification of trucks, but it's not just that.
And one company, Austin, Texas-based EV company Hyliion has been working on that. They recently announced the formation of a collaboration with trucking fleet leaders representing over 100,000 class eight commercial trucks globally. The likes of Wegmans, Ab InBev, and logistics giant Werner Enterprises weighing in on Hyliion's technology to roll out their hybrid electric drive trains for trucks.
And for more on that, I want to bring on the founder and CEO of Hyliion. Thomas Healy joins us once again here. And Thomas, good to have you back on. We were talking to you last time right when you guys completed your SPAC merger to publicly trade. And you made some progress here. The formation of this council seems interesting. Talk to me about what you're trying to do with that to really learn from your customers what they're looking for now.
THOMAS HEALY: I appreciate you having me back on again. And last week, we announced the formation of this group of fleets. You mentioned a couple of them. We also have fleets like Ryder and Penske and Schneider in this mix as well here. And really, our goal is to pull together some of the leaders in this industry who operate a bunch of vehicles, who are really driving the shift towards electrification, and pull them in to actually start working with us early here in the development of our technology. So that as we go and roll it out with these fleets, we know that our solution is going to be the right fit.
We're bringing forward electrified products to this market, but we're doing it in a unique way, where we actually produce the electricity on the vehicle, as opposed to needing to use the grid. And so, it's really offering a fleet the best of electrification, but not the downsides of range anxiety and high charging costs. And so, we're really thrilled to be working with these fleets to make sure we offer them the best solution out there.
ZACK GUZMAN: Yeah, it seems like the market right now is trying to digest which is the best solution, right? Because to your point, we've talked a lot about maybe going full electric and maybe some of the concerns that some of those customers out there might have when it comes to trucking. But Hyliion shares down about 60% since you completed that process, this SPAC merger back in October.
I wonder right now, what you need to show to kind of, I guess, manifest that growth or prove to investors that you're on the direction to hit the forecast you laid out when you completed that SPAC merger. Because is it going to be selling these trucks or getting a big name partner to sign on a certain amount of their fleets? What do you think it is that's going to need to really convince the market that going with the natural gas kind of machine on board these trucks is the right way to go?
THOMAS HEALY: Yeah, so I think there's a couple of things here. I mean, one is continue to showing milestones like what we did this-- the couple of days ago of announcing these fleets that we're working with. For us, we're in a little bit of a unique situation, where we actually already have a product out on the road, our hybrid electric solution.
That puts us ahead of some of the other companies in this space in terms of getting electric products out there. And then, we also need to continue to show milestones of getting more hybrid trucks, doing demo trucks later this year with fleets, and then going into next year, really ramping up volume. So we're on track to being able to achieve all those. And I think that's what's ultimately going to grow the long-term value in our organization.
AKIKO FUJITA: You talked about producing electricity in the vehicle I wonder if you can talk a little more about the mechanics of all of this and why specifically you're not going all in on EVs, but taking this route.
THOMAS HEALY: Yeah, so the trucking space is very different than passenger car, right? You think about passenger cars, you're going to drive 30 miles a day or so. With trucking, some of these fleets are operating at 500, 600 miles a day. And so when you think about trying to store all that electricity in a battery pack on the vehicle, the size of the battery, the weight of that battery, it becomes unrealistic. And so that's where we're taking an approach for that long haul market, where we can actually use natural gas today on that vehicle to produce electricity to charge the batteries. And we can actually do that for cheaper and do it greener than you can buy electricity off of the grid.
And then we even laid out a road map where, in the future, we can actually use hydrogen to recharge that battery pack as well. And so, we see this as the logical approach for that long haul market. Once again, very different than passenger cars and what we're seeing happening there, though.
AKIKO FUJITA: Yeah, having said that, it does feel like ultimately in the long run, we are going in towards an all EV direction. How far out do you think we're from that? Because it sounds like you're taking more of a realistic approach out of necessity, but it feels like the long-term outlook doesn't include natural gas.
THOMAS HEALY: Yeah, I think for us, we see electrification is really at the start in the trucking industry. I mean, over 90% of the vehicles out there, probably close to 99% of the vehicles, are running off of diesel fuel. And so this shift towards electrification, no doubt it's happening. But it is going to take some time here. And we see that as you look at going to a hydrogen-based future, there are some big milestones that still need to happen, like building out infrastructure and also reducing the cost of hydrogen. I mean, hydrogen is, like, five times the cost of diesel fuel today. So there's a lot of cost decrease that need to happen in order to make that a practical solution in the future.
Versus where we sit today is natural gas is about half or a third of the cost of what diesel fuel is. And so, that's where we see there's a great ability here to really get into the market using natural gas to charge the batteries. And then over time, as hydrogen evolves, we can make that step into hydrogen. But to try to force that today, it's not a practical solution for fleets.
ZACK GUZMAN: You guys reported earnings in February. You noted seven hybrid electric units in the fourth quarter and 20 hybrid electric units for the full year 2020. I mean, when you're looking at these milestones as you describe them, what's that going to look like for 2021 and maybe building out some of those deliverables?
THOMAS HEALY: So this year we're going to continue to ramp up the amount of hybrid systems we're getting out on the road. And then for us, we're also going to start shipping some early demo units of that hybrid truck powertrain. And then going into next year in '22 is when we're going to start ramping up the amount of units of the hybrid truck that we're going to be able to deliver.
So for us, for the audience here, I think keep looking for one. We're getting units out into fleet's hands, making announcements with working with these partner fleets like we did a week ago, and just continue to see that traction of getting units out in the field. Because ultimately, that's the success of the organization, is actually getting these units in fleet's hands to let them experience it in their own operations and with the goal of reducing costs and reducing emissions at the same time.
AKIKO FUJITA: Hyliion founder and CEO Thomas Healy, it's good to talk to you today. We'd love to have you back on the show as we track the progress of the company.