Two of the biggest trends for investors in 2020 are electric vehicles and blank-check companies. So, is it any wonder that the market is so interested in Hyliion (NYSE:HYLN) stock?
Hyliion is one of the newest names on the New York Stock Exchange. Less than a month ago, it merged with a special purpose acquisition company, Tortoise Acquisition.
What makes Hyliion different is that it’s not a run-of-the mill electric vehicle stock. Hyliion is a battery-powered heavy-duty truck company.
The Company at a Glance
Hyliion was founded in 2015. It currently makes fully electric powertrain engines for Class 8 commercial vehicles. It also produces hybrid engines that make diesel more efficient and inexpensive.
Hyliion has also announced plans to make Hypertruck ERX, which will have a fully electric drivetrain. Importantly, compressed natural gas will help power the Hypertruck ERX.
The Hypertruck ERX, which will have a range of more than 1,000 miles, should be on sale next year.
What else do you need to know? Well, led by 28-year-old Thomas Healy, Hyliion plans for Hypertruck to accelerate from zero to 60 mph in 20 seconds while hauling 80,000 pounds. It would have a payload capacity of 53,000 pounds, and a full recharge time of just 10 minutes.
Agility, a global trucking company that trades on the Kuwait and Dubai stock exchanges, announced earlier this year that it preordered 1,000 of the vehicles while also taking a stake in the company.
“The Hyliion technology is so game-changing that all companies, especially those with consumer-facing brands, will be forced to adapt,” said Agility CEO Tarek Sultan. “It’s a triple win: Protect the environment, keep customers happy and benefit shareholders by improving the bottom line. We look forward to bringing significant cost savings and greater efficiency to our customers.”
A Self-Made Billionaire
The merger between Tortoise and Hyliion made Healy America’s youngest self-made billionaire. In all, the company was valued at $6.7 billion when it went public. Healy, who remains the largest shareholder, has a stake of roughly $1.5 billion.
Now he has to deliver. And the company’s first month in the public markets has been rocky.
Those gains were brief — HYLN stock has fallen more than 50% over the last month. Some of that can be attributed to a note from short-seller Bonitas Research. The report raised doubts about the company’s claim that its hybrid technology can be retrofitted on any Class 8 diesel truck to create 30% fuel efficiency savings.
But it’s way too early to even think about the Tortoise-Hyliion merger as a bust.
First of all, there’s going to be enormous pressure in the future for trucking companies to find ways to reduce their reliance on fossil fuels. Companies seriously want to avoid their reliance on diesel and gasoline.
The research firm Deloitte estimates that by 2026, 67% of commercial vehicles will have alternative drive systems. And 80% of commercial vehicles used for long-distance work will be operating on natural gas, the firm projects.
The Bottom Line on HYLN Stock
When you consider the number of companies involved in commercial trucking, and the idea that most commercial vehicles will be operating with some sort of alternative fuel in the next six years, the potential for HYLN stock becomes crystal clear.
Hyliion and Tortoise aren’t the first marriage between a SPAC and an EV company this year, and we’ll surely see others.
But the potential for growth in this deal makes HYLN stock a buy. It has an A grade and a strong buy recommendation in my Portfolio Grader right now.
— Louis Navellier and the InvestorPlace Research StaffAmerica's #1 Stock Picker: BUY "AMZN of Houses" [sponsor]
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Source: Investor Place