Hyliion Holdings Inc.
The Karno was developed by a skunk works team inside GE's aviation division.

Hyliion to buy fuel-agnostic GE generator project

Aug. 26, 2022
The $37 million deal is expected to close in the next five weeks. CEO Thomas Healy expects the company will spend more than $75 million to commercialize the technology.

The leaders of electrified powertrain manufacturer Hyliion Holdings Corp. have struck a deal with General Electric Co. to buy a fuel-agnostic generator that promises efficiency improvements of 20% and more over conventional equipment.

Austin-based Hyliion said Aug. 25 it will pay GE $15 million in cash and about $22 million worth of stock for the industrial giant’s Karno business, which was developed by a metal additive technologies group in GE’s aviation division. As part of the deal, which is expected to close by the end of September, Hyliion will take on a skunk works team of engineers in Cincinnati. After a transition period where that team will stay on GE’s premises, Hyliion will open its own office in the Queen City.

See also: Hyliion, Cummins partner to optimize natural gas, electric powertrain

“Hyliion will leverage the Karno as the next-generation generator onboard the Hypertruck, creating a solution that will operate on various fuel sources that are available today, while remaining future-proofed to run on hydrogen when it becomes widely accessible,” Thomas Healy, founder and CEO of 7-year-old Hyliion, said in a statement.

Hypertruck is Hyliion’s range extension platform for Class 8 trucks that is recharged by an onboard generator. The company two months ago said it had joined forces with Cummins Inc. to optimize the latter’s natural-gas engines using Hyliion’s ERX powertrain, which is on track to come to market late next year. Healy said the Karno will be the company’s next hybrid variant (and will hit the market “a couple of years” after the ERX) as it looks to move toward hydrogen-powered products.

The Karno system is able to accommodate more than 20 fuel types, has lower electricity costs and is expected to provide greater thermal and fuel-to-wheel efficiencies than fuel cells or international combustion engines. On a call with analysts and investors, Healy said Hyliion expects to incur between $75 million and $100 million in operating expenses to bring Karno to market and also will look to take its technology into markets adjacent to Class 8 trucks.

“We’ve heard time and time again from fleets that, as they think about adopting electric vehicles […], the grid and the power supply going into their buildings are not able to supply enough electricity to actually charge their vehicles and that they’re limited in the number of vehicles they can actually deploy,” Healy said. “With the Karno, we could deploy these in a distributed power application where we could be the provider of electricity to these chargers.”

Healy and his team early this month reported a second-quarter net loss of $33.5 million as they ramped up research, development, and test spending and stuck to their full-year sales forecasts of $2 million to $3 million. The company ended June with firm orders for 200 ERX units and reservations for nearly 2,000 more.

Hyliion shares (Ticker: HLYN) rose more than 4% Aug. 25 on news of the GE deal. They are down slightly over the past six months, trimming the company’s market capitalization to about $685 million.

About the Author

Geert De Lombaerde | Senior Editor

A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications FleetOwner, Healthcare InnovationIndustryWeek, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.

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