Hyliion Holdings Corp. (NYSE: HYLN), a leader in electricity-producing technology, has announced a non-binding Letter of Intent (LOI) with ANA Inc., a significant player in the mobile industrial equipment sector. This agreement indicates ANA’s plan to acquire up to six KARNO™ generators, beginning with a pilot trial of a 200kW unit slated for 2025, followed by the potential addition of five more units.
ANA Inc. is well-regarded for its high-performance generators and energy solutions and intends to evaluate the capabilities of the KARNO generator for mobile power generation applications. Mike Niemela, CEO of ANA, expressed the company’s dedication to delivering reliable and efficient power solutions that align with sustainable energy goals.
The KARNO generator is distinguished by its advanced technology, low maintenance needs, and ability to operate on multiple fuel types, including natural gas. Its design is particularly suited for mobile applications, characterized by quiet operation and high efficiency.
Thomas Healy, Founder and CEO of Hyliion, emphasized the significance of this strategic partnership in integrating KARNO generators into ANA’s product offerings, which will cater to the unique demands of the mobile rental industry.
The finalization of this partnership will depend on a binding agreement that outlines volume commitments, primary responsibilities, and the possibility of exclusive collaboration on hybrid power generation solutions within the rental market.
Headquartered in Austin, Texas, Hyliion focuses on distributed power generators capable of utilizing various fuel sources. The company aims to serve the commercial and waste management sectors with generators that provide prime power and energy arbitrage opportunities. Hyliion is also exploring applications for its technology in mobile industries, including vehicles and marine.
This announcement comes alongside significant developments for Hyliion. The company’s KARNO linear generator has been designated an eligible technology under California’s Renewable Portfolio Standard program, which may contribute to the state’s climate objectives. Additionally, Hyliion secured a $15 million contract from the Office of Naval Research for potential use on Navy ships and in stationary power applications, along with a Small Business Innovation Research contract from the U.S. Navy for designing a modular generator system utilizing KARNO technology.
Furthermore, Hyliion has entered a non-binding Memorandum of Understanding with Jardine Engineering Corporation Limited to implement KARNO technology in power generation projects across Hong Kong, Macau, and other regions. Despite reporting a net loss of $10.9 million in Q2 2024, Hyliion remains optimistic about its financial outlook, as all planned KARNO generator units for 2024 have secured letters of intent, with over half already committed for 2025. The company expects to achieve breakeven gross margins by late 2025 or early 2026 and anticipates revenue in the low double-digit millions for 2025. These developments highlight Hyliion’s commitment to innovation and sustainable energy solutions.
InvestingPro Insights indicates that Hyliion is making strategic strides in the electricity-producing technology arena. The company’s market capitalization currently stands at $414.86 million, positioning it as a niche player in the industry. Hyliion’s stock has exhibited strong performance, boasting a 123.36% total return over the past year and an impressive 193.72% return year-to-date, reflecting increased investor interest.
However, financial challenges persist, as the company is rapidly depleting cash reserves while focusing on developing and commercializing new technologies like the KARNO generator. With a negative P/E ratio of -5.71 as of Q2 2024, Hyliion is not yet profitable. Nevertheless, the company has a favorable balance sheet, holding more cash than debt, which may offer financial flexibility as it continues to pursue partnerships like the one with ANA Inc.
Investors interested in a detailed analysis of Hyliion’s financial health and market position can access additional insights and tips from InvestingPro.
You Might Be Interested In