What happened
Owners of Hyliion (HYLN 3.28%) stock haven't had a good year. Shares of the provider of electrified powertrain solutions for Class 8 semitrucks have lost more than 40% so far in 2023.
But shares are soaring today thanks to a key development for the company and its much larger partner Cummins (CMI -0.16%). Shares jumped as much as 18.5% Monday morning, and were still higher by 15.6% as of 11:50 a.m. ET.
So what
The stock's year-to-date performance isn't overly surprising considering the company only expects to generate $10 million in revenue for the full year. But Hyliion hopes revenue will grow quickly once it is able to commercialize its Hypertruck ERX powertrain offering. Today it announced a key step toward that commercialization.
The California Air Resources Board (CARB) has certified Hyliion and Cummins with a dual executive order for the ERX powertrain paired with Cummins' natural gas heavy truck engine. Hyliion founder and CEO Thomas Healy called the certification "pivotal" and a major milestone in the commercialization process for sales in California.
Now what
The Hypertruck ERX powertrain solution is an electric range extender that will use Cummins' natural gas engine as a generator to recharge the electric truck's batteries. The electric powertrain offers up to 75 miles of range, but when paired with the generator, the system can provide up to 1,000 miles of total range. That should give it enough range to utilize the nearly 700 natural gas fueling stations in the U.S. to refuel the generator.
Hyliion is taking orders for the system and expects initial deliveries of the Hypertruck ERX powertrain with the ISX12N Cummins natural gas engine to begin before the end of this year.
Hyliion ended the second quarter with a little more than $350 million in total capital. Investors who are hoping sales of the newly certified system in California will boost revenue quickly are jumping into the beaten-down stock today.
