Earnings call transcript Q2 2023

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Operator

Thank you for standing by. Welcome to Hyliion Holdings Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the management remarks, there will be a question-and-answer session.

I would now like to turn the conference over to Kellen Ferris, Hyliion's Director of Investor Relations. ahead. go please Kellen,

Kellen Ferris

good conference Welcome call. and second Hyliion quarter earnings morning, you to everyone. Holdings' Thank

financial presentation On our and at and chief investors.hyliion.com. Chief call is Executive A the today, Investor Officer Jon are available on Panzer, Relations conference accompanies this that Thomas Hyliion's Healy, officer. call slide website our

Please statements business company's regarding during outlook. call, will we today's that the note make forward-looking certain

statements as about current Forward-looking are anticipated statements that materially statements and call. are and on assumptions, predictions, from this are could results risks expectations to other and factors cause such projections subject based forward-looking Many to on events uncertainties. made actual differ

information our differ and Securities our more company's presentation Commission. factors such filings the and release Exchange refer cause results materially well as with to For press to the as that forward-looking about may from statements, please

put to no required on not duty cautioned update statements undertake by this to are undue information unless and law. we reliance You applicable forward-looking

will over I the call to turn Now Thomas.

Thomas Healy

Hyliion Welcome second call. to XXXX earnings quarter

market of the go our will to We forward forward XX, learn as we more on more over about webcast be Investor viewers XX our Hyliion's production showcased our the to for at products. Hypertruck as newly in in-person strategy strategy. what planned ever go hosted and the building unveiled We than headquarters. XXX first first quarter, Austin, Texas June these well attendees in the on and Day tune powertrain During second ERX product had offering

space. some recent place have the to an on on landscape call, in market and taken today's like perspectives that To share I'd the electrification start events update

with and a experienced their their another bankruptcy market one unfortunately, and see they We've providers the as filed financial in initial that other you space of the be significant companies in issues in As losses months. leader also some units of industry recent they faced aware, seen our Monday, products. have are may last number for on

Hyliion shareholder same diligently well we grow the cash near and quarters. working faces as Hyliion over are avoid been value. our to trading many to value below few last the and has challenges outcome or

one and assess strategic position. business others is this, Hyliion utilize light cash we space our ensure our In possible. However, to effectively we priorities as of model differences the in continue our to of between the as and capital

that have seen years model. past over to that business space our in impacted will Hyliion's continue and shifts electrification us expect the few We these significant impact have peers. And the shifts we

from suppliers chain For mandates. example, seen timeline, we increases our wavering potentially impacted price supply constraints have that development experienced our continue development both regulatory have to on component see have positive and and

we see electrification path strategies the result, a As adoption. adjusting along they move to their as fleets further

position, to conserve solutions that fleet's cash Going continue our for ways bolster to forward, help we will business, de-contenting to meets the OEMs needs. our by our product prevent offerings optimize look and deliver

We've acquisition the already fuel executed a Technology with our to Generator vehicle. cell-powered build on partnership opportunities development our and of Hyzon KARNO like

cash and continue strengthen ways customers. products our and conserve deliver model optimize to will business We to for business to look our to

Shifting year. this now powertrain update are to I'd to Hypertruck on respect like an we ERX the to with ERX. Hypertruck later launching share the where

and the year. we mentioned, of production just begun of we end XX the first installation trucks have As our to the truck by plan ship

latest extended the seven fleet vehicles. out quarter On have ago, of pushed into in pre-production quarters Unfortunately, build to our had trials this year. timeline the trials of second Hypertruck commercialization needed unveiled the fleet these to delays to third quarter receiving begin due we ERX planned in we start of components that we our

in trials to start coming expect weeks. these we However, the

working for initial their with timing production to trucks. delivery and presently fleets We're orders confirm

procuring for are our many fleet QX With as presently extended booked with process trials completely final stage various of solution, with trials and fleets. we decision the the fleets through their

are fleets, discussions from With our and have confident we deliver by year. have we interest received the ongoing the ability in end this trucks to the we of XX

from we feedback for trials will on fleet get ramp ramp. we back up projected further plans initial our adoption, and assess come with our volume these XXXX As clarity and

shared early manufacturing unexpected since the still supply being be base quarter that seen worked or to and ramp supply how This in pricing from Even we've last when shifting our electrification delivery is agreements, we still our base. stages, we'll increases restructuring and speaks founders' its further are out. and market price

which sell of fleets, loss we've As realize these trucks some expect will units. to previously we reducing pass along increases us first while to gross to on price the shared, onto allow the working we're the

is achieve Vehicle to passed NHTSA I Another we EPA satisfy requirements. To milestone Motor relating powertrain. to complete to journey our Standards FMVSS. share our pleased certifications Safety our and that successfully am all Federal NHTSA CARB, or commercialization on required or have the

and with we have this Thus, readiness the CARB track complete confident our in QX. also trucks in begin are shipping quarter. to on we'll We believe in remain fourth

would of electric Also, initially will next launch of trucks truck, plug the sleeper that When ERX the unveiled and selected we variant during and be daycab Day, daycab the electric on applications. for we ERX truck Investor a truck. range-extender powertrain Hypertruck for believe applications that the adopt we in sleeper the a fleets Hypertruck

range powertrain Hypertruck plug-in expected, or to exist in adopting costly that finding quarters, increasing over much difficult is begun we charging daycab couple a of have is the either vehicle. electric than the trucks, from and to the doesn't Thus, install. ERX they on fleets and limited are a seen more infrastructure last fleet they interest As

have powertrain moving with to and are initial development ready planning are the in therefore forward XXXX. We

development, weight in weighed moving daycab. exploring to the addition that also remove in to variant operate ways to this for of Thus, a help the to we will the to design tank Hypertruck to hinder applications. and with savings daycab, We've and battery hauling sizes of plan sleeper ability heard on reduce improvements out its embark to cost weight. we are ERX the we incorporate As weight fleets additional from

of qualify QX, plan This that or ZEV Clean qualify pleased vehicles powertrain the which to for mandate, share mandate. for In sleeper qualify level under the fuel-cell this truck Hypertruck covers start will then credits why ERX to a first reason Fleet adoption we an Advanced I'm to the a our ACF daycab adopting starting will regulates the as product the XXXX. passed electric battery in or of additional to XXXX. for that and ERX vehicles daycab in later same Hypertruck will CARB of add fleets portfolio. variant the trucks is ACF credit powertrain require

into outlined but EPA of natural XX-liter certified the engine Cummins XXXX, the natural be integrate gas the CARB gas to gas only by natural around is new Cummins EPA engine. meaning engine will Hypertruck in integration both late-XXXX, EPA plans is We can't will presently We the which XX-liter certified our utilize we and XX-liter be it Cummins XXXX, the engine, be development carbon for also expected Cummins which work ERX in sold California. the certified. Thus, to XX-liter

depicted our to will model dimensions the its power approximate of what like, KARNO plans look KARNO, stationary footprint Now XXX-kilowatt and on we including as a small generator unveiled representative slide. this shifting

see for able stationary applications, problems. exceeding as the prime our grid of locations. strong it solution for a that's anticipate the expectations being to electricity to solve power power has for less that continue cost in KARNO as ability we We to a We produce interest fit see than most various

and low-cost natural to areas on It in gas, than conventional be requires also could on also the propane, where low be used electricity fuels is like a ammonia. The has power electricity help generators, The footprint operates power is noise used diesel, carbon shaving, zero grid limited fuels the and smaller levelized to to KARNO unavailable. produce very KARNO agnostic, conventional fuel offers and for hydrogen maintenance, a and clean, emission like peak demand generator on able grid run even levels.

We KARNO produce compromising levels, also not stacked how its greater to benefits. can while of showcased units any power the be together

with footprint output. For more of container shipping reference, than of megawatts power a generators could the XX-foot X produce filled KARNO

to third size path the generator coming half of generators, the is a solutions new the XX our today. charging commercial to next units. ability over the to one electrified as technologies We powering tenth market it the XX to broadens even to footprint and This provide the months, achievable clean KARNO conventional of vehicle EV market stationary the size some market of see and on by

this KARNO and the call, key both accompanying can KARNO In what presentation years. next slide over Stationary milestones Hypertruck few showcased the we've the be Generator that will the the you for see

will initial Stationary that We that of are revenue expect And planning deployments year. be Generator we next begin these generating. to KARNO

their initial We discussions with are generator. likely already the in underway of deployment customers around well

KARNO validate be for KARNO generator the to development are powertrain, over also few continuing we and we the XXXX. with ready years, fleet We Hypertruck as in the integrate to plan work to integrate starting next trials the into hypertrophy initial the

The kicked XXX-kilowatt we powertrain initial integration technology, of of Hypertruck is off hydrogen an Hyzon's powertrain the vehicle. announced Hyzon, A development where ago, Hypertruck third Hyliion's fuel-cell variant couple a quarters our version. partnership fuel-cell a powertrain technology with of latest we with on

this well just now complete and on ago. that test project share drive be and remains its year. this a going been completed a weeks will test has We and pleased the few and vehicle are of end track is very development around to running up by initial This this track

turn more I will Jon share from over the call this about the now past to to quarter. financials

Jon Panzer

And Thomas. everyone. good morning, you, Thank

our financial Turning results. to

quarter we totaled is For The $X.X of compared by to expenses to to research second the the quarter year. from ago. SG&A second the compared reported last of and $XXX,XXX increase million, development an partly system spending growth and sales, lower offset quarter in year-over-year in expenses. a year increase $XXX,XXX of second costs Operating due hybrid million $XX.X revenue of

Hypertruck million that as R&D to costs went powertrain related costs $X.X the up million higher development $X.X due expense production KARNO. were were quarter. components development received truck up ERX Powertrain expenses we in to the quarter in and

system the if component system, are used purchases customers. The in lower complete power sold offset to mentioned R&D be last this Hypertruck that by all partly quarter. to those ERX trains related will impact expensing even expenses parts until be to the in of I will R&D continue that quarter on later other ultimately Hypertruck ERX the work production on work we expensed was

component have our on purchases of that expect costs, towards progress will we commercialization. production a forward, make ERX R&D system impact negligible as Hypertruck expensing we Going

driver that in costs did we have quarter expenses the in was of not The KARNO R&D XXXX. second higher

As comparisons KARNO first a in year-over-year for KARNO and XXXX the reminder, of the expenses three therefore, this to third quarter of second need GE, expenses quarters from quarter, Technology of million. purchased were Total account this year we in in late the difference. $X.X

up is loss which higher net In total, a income sales expenses. million a as reported cost ago, this for loss year company the quarter, the year reported nearly $XX.X lower interest $XX.X from million Hyliion offset higher of second of operating and the

which purchases, of production partly half. million, powertrain remaining year, Looking expenses was increase the lower offset the to by of in expenses million performance was million half R&D the revenue component were of $X.X compared first to first expenses $XX.X KARNO $XX.X consisted the year-over-year was of XXXX. operating million at other for driven XXXX. of higher $X.X in Total of year-to-date R&D $XXX,XXX expensing by Again, cost by work. for the higher million, compared The R&D expenses driven in $XX.X in $XXX,XXX, costs

expenses were Finally, first the with approximately XXXX. half in SG&A flat

first We at $XX compared spent million, the total half end to in second the to $XXX $XXX in of end XXXX. of quarter to Our million $XX.X million term this million the investments the the compared $XX.X $XX at the net $XX of year. and of the long-term XXXX. quarter short the in first quarter quarter and and in with $XXX We compared million, loss of million second cash, XXXX million first was ended quarter, million year-to-date of

cash working expenses, As growth. we and help capital discussed that burn actions operating capital last will expect actions reduce taking quarter, and these are will we spending significantly reduce that

million than in June We component and at less hold continue we back of approximately we $XXX Investor cash guidance continue expenditures. project total to unexpected year. production the Also, million, the of of working impact capital to operating growth, our capital this expenses, despite operating shared that including $XXX to expensing expenses, cash Day truck consumption

well second the ended $XXX flexibility which including of ERX development Hypertruck we work. work, capital truck as gives us noted, with initial continue previously commercialization as to deliveries, KARNO quarter As total million

We a capital $XXX into expect to of around give balance future. us which finish total million, the year financial will with the flexibility

favorable in XXXX market this conditions remain opportunistic no for We have year, are and to plans raising additional but beyond raise capital. if we'll capital equity

that, to I'll over turn back With it Thomas.

Thomas Healy

Thanks, Jon.

to who the recording encourage technology, up video Day like I'd yet The move to we the a do presentation to our KARNO great as anyone well this This As on Hypertruck generator. Investor found channel. offers hasn't so. overview watched powertrain both wrap can Hyliion's be and Q&A, on call YouTube as

call open the will now to up We Q&A.

Operator

Thank comes Donovan Please you. question from Schafer. [Operator first ahead. go line The Instructions] of

Donovan Schafer

Yes. Hi, guys. question. Thanks the for taking

about So, doing ERX, the I first Hypertruck want XX to talk units. those

you're, being on and like it. there on you and pretty said and But comfortable, seeing the like feel you Investor list kind of working Sounds crews at you're the the track. everything Day,

I'm of was the being like on being and into this curve anything is these. learning just of start there's curious, mode this, a like in production kind

kind the already now, teams of just pace, that keep at XX point a at XX hit are units? --those that a the pumping run-rate, you'll they doing this, if the them current is where right at doing that where crews they're already, that this, you're So out are

Or certain every they of baked of get is day, the there expected better. amount or kind little in bit well, a

So improvement. it's strictly linear a not of kind

a help you units. to will there's get and XX certain expected improvements of kind amount just of that So timing the

to talk can there, Just that. to you kind if of the curious nature

Jon Panzer

it's good Donovan. Yeah, question, a

it You big able or to XX, actually the no all from now all. But at be had to changes, no with those ballpark see drastic opportunity right achieve are production a we in standpoint changes the to firsthand.

single at other so day. are your from installs we standpoint, And getting that comment, every faster

been impressive, and don't have we have the Actually, to gotten either. all time yet been it improve times able that of out think we've the quite that teams that

So be of we able standpoint, team that XX end the The the competence achieve high have. units operations have year. from to and have that we we ability by with setup those that to facility

to parallel Hypertruck capability other path installs ability note ERX to is do well. up [Indiscernible] also thing able are in as I'll The we teeing be

to have And going go centers. scale so as us to volume that's allow our we be from to able systems

Donovan Schafer

That's second still think helpful. seen, that toward curious kind can give on any I XXX,XXX the get not. daycab, we cost with And kind I'm that question of even daycab. could around full you you mark, a to or and may ERX if it, And of color is battery then how crossover being Okay. high-XXX,XXXs. the the are credit you've can the about actually understand that we do [indiscernible] as related the smaller the Hypertruck moving hit increases

daytab So if compare? XXXk just, get can if a sense you XXk can we kind How or lower of rough kind of under the of if lower. would it's

Jon Panzer

Sure.

first So let's sleeper variant cab with start the it. of

as we're we that and we've expressed still in previous is high-XXX,XXX, targeting. mentioned, So where call,

already received Act is that Reduction will the account XX,XXX. into that that be Inflation Now, the benefit taking from

we're still So for track high-XXXs. on that

price put daycab, it's terms With too numbers respect early the system. in on to cost to of and still that that of

able daycab. improvements looking some are to smaller the the obviously also to being a towards a expensive at market. the you are is And of push a are to even from looking is. Daycabs so just going we ACF truck because one of size on less sleeper just mentioned, less shift sleeper we what battery the reducing us someplace in tanks still then the a targeting As is than achieve conventionally range vehicle while the credit, pack, of daycab that at

of pricing come a on actually daycab So look what the more would like. to though

Donovan Schafer

just one also In having revenue. in you in Okay. more 'XX, And deployed sets if stationary generating about I KARNO then can squeeze release, talk the generator. demo the on and

that of of are one -- kind there of have out those thing? buckets two set separate same So and I'm set revenue? demo units, curious you would units a generating the are of have separate You

and you'd kind call them you Or deploy demo is units, these, some model. of like, have, it maybe of revenue you because the

that. and selling the people groups two stuff kind and ownership separate it's be units Would of like or you but you unit, out sort keep off helping and batches? electricity, or the show You're of concept to they to the of prove still to allows the same it

Jon Panzer

at I it the think unit. to that's where look same be will

are on as with call, then and cases one agreements discussions appropriately. adopter. at working structuring and mentioned go right them likely use Now early We'll we each the we these, with looking now be the what their potential and obviously, as I deploy long-term in these of

I as standpoint, so look And them at in your though, think, from same bucket. the

kind and hopefully Our goal in units is great generate then as scale be a deploying XXXX, into of, off able be early these volume speeding able that to those we'll that then that from units we there. the be of market go to will to revenue see

Donovan Schafer

of take Okay, great. offline. guys. rest my questions I'll Thanks,

Operator

line the from of comes Steven UBS. question of next Your Fisher

line Your is open.

Steven Fisher

Good Thanks. morning.

generator, follow question. gross generate know I give in is that at margin this is just sight that be somebody having XXXX. you KARNO can timing bigger on and positivity need scale? out to sense even stationary of KARNO point up us further a a something of and of that that plan sort to on path revenues you you Just much that's that to or your line the Can

Jon Panzer

this even Steven, some even to opportunity get that question. and though revenue just we Jon. we demonstration current next is We're excited units them. year, service Hey, for an some acquire and technology put Hi, that have the great

projected or in terms margin. of expectations shared yet gross our We haven't

units. is don't forecast long beyond not not those terms we and to through getting as in ready and engineering yet. pathway able of it. KARNO I up a specific we're good we as but But gross expect But a think to think ramping then just quite a ramp But is long any positive we things, want margins. work being able to story to KARNO, we'll yet you there's kind overall wouldn't XXXX we to sales just that of up in do on we that demo do one But numbers that we'll the the not story give pretty be

Steven Fisher

terms daycab. that the it. development product of of Got That's does affect How in And helpful. then cash burn? the your

Thomas Healy

start And Jon I'll chime it off. as in well. Yeah, can more

be mentioned, spend. that. touch But solution, improved onto team we've the truck Texas, taking of engineering is already knowledge. some to cost daycab. that there'll we weight benefits So sleeper Austin, a same it the of done we'll that carrying over the a we benefits lot as Jon development and have already let still on so I'll in utilizing there lot And a And, be the on

Jon Panzer

share SG&A expenses the about with taking unusual expensing. of year of been Investor couple made we bit our beginning I looking about that we And of component talked around little be I've and I some been to I expense this related also the We're spent to out flatten years. the And last in flattening even the the trying or today that Yeah, to addition out. this year. R&D when would KARNO. that for comments flattening a cash of our And of I've at did too through what is the R&D context out. at Day look next projected outlook costs out the with

sleeper shift as those and mentioned, we that as towards the over had things over we the other that Thomas truck, So the work these past be to complete and sleeper truck including shifting development the spent, XX-liter the will R&D over will daycab. people money on

big don't burn about big a that to to up XX-liter. spend daycab what additional but want get product talking next or daycab. with really cash So of don't I I getting the we precisely, is, the here we're It's there too follow-on the ramp I'm forecast expect at a guess and

Steven Fisher

terrific. much. you Okay, Thank very

Operator

Peterson of comes JPMorgan. next line the from Your question Bill of

line Your is open.

Unidentified Analyst

get for for vehicles? would start, Kakani your taking is seeing what type impacts around Thanks so to we in good what questions. for the that's been any And of later you've the deliveries clarification This on Bill. on some expected ERX? Mihima Hi, delays can this [ph] electrification issues year our component Maybe led much morning. be building if

Thomas Healy

to We met we there components the what improvements make our that in really work with that saw were laying be they deficiencies we the for were was supply to were and And were saw to think that I standards. to that those there. the then us so in they coming suppliers base. meet quality some able that Yeah, were specifications out proper producing we products ensuring able

wiring making outlined. what that to metal, correct, they delays. that to spec those led So to are things like the And built well roads really build sure specs were the paint making That's of specs sheet there. had harsh out some harnesses, sure we that were tolerances going correct, conditions the of sure those as the to as make meet we're are

I our job supplies. had great think a and So forecasting needed in when team we done out components

for chain meet material meet. building saw remaining that just and out say in then the that I'm to the didn't quite we in, pleased to issues. we And pre-production very some to that was base correct trucks. those development Unfortunately, coming diligently and were of specifications worked well now process those the demands the looking supply the of And we're that

Unidentified Analyst

one. really initial certain your color. comfortable XXXX up getting us little a on about And up customers? you inventory building you having beyond? there of these is feel in bit a maybe Like a you ramp tell helpful second that to versus as you. That's inventory XX then and level philosophy Thank trucks ERX Can

Thomas Healy

Yeah.

is out in trucks orders hands the then and focus those of now built obviously right So securing the getting XX, the customers. both and those

ahead. at How we plan and XXXX to volumes at using this adoption these we coming on at bit that on As look get things with a further the looking information we one back little the the that these input what XXXX, So to that founders how be? are further initial as units expected year, really we're go? fleet look of later go, of extended closely trials does units is

able the away demanding to and commitments. their for mentioned industry many making something is, that's is is of we kind rightfully weeks so. today's call, as it start fleet is I order from think you But trials, expected extended these at And before gating on places we're that final which think item being

to time just experience a not want is commitments. their for actually willing they're technology of that's in that operations they And before period to place Hyliion. first order something As uncommon to

Unidentified Analyst

for Okay, taking questions. so great. much your Thanks

Operator

Your next the line Andres Fitzgerald. question Sheppard of Cantor comes of from

line open. is Your

Andres Sheppard

Great, for for questions. wanted cadence understand the thanks thank vast on Congrats off to to QX majority everyone. start I Just in the might that, that might breakdown taking look of year. you. what there Good And delivery this Should we some the clarifying XX-unit just expect morning, our material maybe be quarter. or by the trying deliveries QX? in like. Thanks.

Thomas Healy

Yeah, so later year. this

target, production trucks. so Day. will taking during be a place. the through of timing going QX So started actually We it sale the at the build And looking deliveries first when Investor we're will the start truck more of QX then

to And process. just through walk the

So PACCAR be the powertrain from Austin. lined be then chasis will up content in Peterbilt the of our what is, we'll sourcing doing technology we've to upfit

going also As as Centers have will well I to in mentioned forward the as do at ability Austin. Mod that

on vehicle, to back will that PACCAR, line through final vehicle credit then to that about. the VIN out be vehicles to that be it the go ready enable these of end go we've to been ACT talking put And customers. certification, that will and go will then And also achieve would

terms when these looking of get the at deliveries that's completes, process. will So back we're But in -- QX

Andres Sheppard

it. Got

And question what I Thomas. that's for a Okay, maybe Jon. Thanks, thought.

point XXXX throughout perhaps we're know of you. I is margins, gross this gross is or XXXX realistic at of some story? terms Thank visibility positive providing much too it to a around but not margins those more target In

Jon Panzer

little bit to is tell. early a it think still I Yeah,

book As we And we're still ready upon noted, on fleet these kick extended order we're that's for next about contingent that working to trials year. our off.

the on getting on, where some the working selling getting also and in powertrain and the getting so, book order And so costs volume also to working powertrains. changes that design point we're place, of and drives, and we're

timing Those expectations gross all for play into margin. on our

right the we losses not expecting we of we're but expect some As noted, gate, do out big reading.

early little of share for a us of things. it's to expectations bit those all because there So

on you very we're So, assured hard. but can it working

Andres Sheppard

Got it.

may. if just maybe Jon. And Thanks, one, last I Okay. one

your mentioned, that raises this You given capital anticipate year, next don't for liquidity, remain you current you any opportunistic year. will but

you can if other? it elaborate raises, wondering one you. trying way year. or about debt next more thinking about just a are better pertains How you potential to I'm it to next bit equity are it capital are as to than understand pertains thinking Thank little towards further, or how leading year? you So you as Just be

Jon Panzer

cash keep sure. We're Day year trying more this shared that that. we're feel it reduced started slowing to we I've about good estimates at down as options. no where We've by burn. the million, be extend whole million our than expectation our that Yeah, Investor year $XX possible, low $XX from it would still for we to as to

that don't today the lot, play being arises, opportunistic we've versus don't and pure type point a show companies, would And I and equity, that capital in else. of some capital markets, extrapolate could and what of is seen The opportunity prospects up, see slides to some we a, we've see, show look probably to more If an need boxes, if the so shown, about equity to so you what we the being probably hey year. due better to we say, on. a really on increase raise this next anything were year, addition I to

the again, strategy. So idea whole is on our us give some to execute to flexibility

to that get best Thomas opportunities, there. to out build see more work sleeper way cab to KARNO figure a ERX. the do There's little get big As out the daycab a the we bit opportunities outlined, and

at the playing might about into keeping that just we and then opportunities hinted minded that strategic are and things, look are things open those of all all other what like, how those our unfold. today, So capital Those they forecasts. might

flexibility of lot months not news in have a we runway things assuming ourselves. and created so. And six to think we're I is, good the going flexibility. We've around turn are that that just or for

about that how how with aligns our think strategic very our about being and plan. we capital strategic So we're using

So flexibility, we're again, got it carefully. we've really things just how watching see go. And we'll

Andres Sheppard

it. Got

appreciate And pass quarter. Okay. on. super on Thank helpful. it that. Thanks, that's again. the you. I'll No, Congrats I

Jon Panzer

you. Thank

Operator

Delaney of Mark Goldman Your line next of question Sachs. comes from the

Your line is open.

Mark Delaney

all morning. questions. ERX bond Good and taking be I earlier KARNO. some details on And the cost for been mentioned suppliers your the you you for of this prepared therefore year. the thanks my remarks believe prices increasing you've that Thank than thinking been could in the have higher

more you give the you I'm sense now us costs? hoping a the able that's suppliers of to single terms of about the better a clarify you're a of magnitude base bit two, a that increase in could give of set Are thinking changes? of on topic. broader driving a breadth of as Maybe that this ERX or the us the is component it or sense doing increase if

Thomas Healy

Sure.

overall So these to since some and on as we in the range. Founders' call. with then, go component is year, back of reasons need customers start to you was, it's significant it what are we couple even on price a on seen that today's price shared maybe that, pass was I'll that than the a of and last to increases, we've a years Even dollars earnings of that kind we those agreements, one as those thousands shared increases some theme increases. revisit more the for drove component call first And of of more just us heard you mentioned -- we the

from so suppliers we're is increasing price what seeing not lightening up yet. that that And just is

of just that the this that to add but from change seeing Hyliion, our to And to at we pricing so, any still going by is unique And I this to that market not price means. stage, it's wanted increases. color see don't

others are the earnings. things we've seen that One reporting is of as

Some significant vehicles. taking shipping are out losses on very

in we Jon so same on we're don't little, And as that that boat. touched the a see

be trucks, see to initial here. to of go cost but out we'll be as a as the And diligently well. then product, as loss for another market are to we working pull forward these that opportunity We after on go at going operating daycab we us

Jon Panzer

Mark, that. I might add to

talking more would you've down of overtime. It's the of so forming systems the lot way. industry coming that think that on haven't And have expect, a you'll lot inflationary working and things just, we're when battery inflection of volumes. like forth. doesn't market a mature and to pricing. people industry yet Class pricing X point new we and dealing you're E-Axles As And naturally, are it reached volume. higher get that volume needs really in with especially the sides other to driven a I The about see got and And

part part design just So procurement of of it's forth. its and its part of so time its

So those are the things that are affecting us.

Mark Delaney

all And makes topic. sense. I on that kind Yeah, up the that of appreciate guess follow to color.

But production Hyliion factors, As in in you're some pass cost and I think can Do XXXX? thinking you of about price terms dynamic of what to you're realize on have build sell? to these what want cost, absorb? gates as that if price may you said ERX I'm may still exact manufacture many in 'XX prepared formulating units you your curious the potential and maybe in comments. you plan, how losses limit Thanks. the

Jon Panzer

And a question. great the a addressed little we've That's Mark. Yeah, this actually past. bit in

meter and we this the really shift improve we next daycab to certified get we our reliability. get that all continue that and California this to sell fit be it want said, miles have other technology We doesn't the product, year. of and Just strategy outlined you recently sell in of in we trucks, so as And that challenges. them. to the that change powertrain we won't have see we -- about engine that of and on KARNO cost, we all that, That we'll quarter can't there out this mean think control XX-liter ramp do opportunity hey, where forth, want the these definitely where that trucks our you the to these around add changes in the a because up ago,

rushing as is quickly not that to we be, weight or trucks further want necessarily because changes get the going where even cost not working back, were to ago a take year daycab we put maybe and out design which out. truck to we're will I that's as on like to But, have, said,

there, be to work things outlined the as the strategy a not be get thoughtful out ramp want We we're the So, where XXXX we other year it's to to these going -- But continue very it's better. today. about up on will the and more volumes not sell. that we a we've

our proving things. those and that of all cash managing help really flow, us types in areas the again, capital, up kind product, So, of would of

that so metering component so So yeah, the factors of be level, is the there could through might next you there on year. level price forth just some as level get that -- interest say depending we the

Mark Delaney

Understood, you. thank

Operator

Investments Chris of next question Your CP Instructions] [Operator line the of comes Fibs from [ph].

Your line is open.

Unidentified Analyst

Hey, guys, can you me okay? hear

Jon Panzer

Yeah.

Unidentified Analyst

right. Thanks. All

or field sales doing having of is mostly sales, Regarding combination you guys far like more online of OEMs, presence or planning reps as like or like like all? for your in field Are with working plan market. the on the

Thomas Healy

Sure.

X to type to trucks. very space an a also for not you're going this do definitely discussions The space working have What's team, sales is how a conventional about of that it's specking Tier used face-to-face commercial So you they're but with market. in-person field the suppliers in closely is presence meetings online vehicle OEM. be their

your go So educate and and out technology fleet on solutions. you want to on the your

dealers, your So they're going new product. brand truck that as placing their specking they're in orders then through

And model a being so opposed as that, powertrain move to seller. that will the be our goal, provider that to we full as of vehicle

something and customary that slot we into. the is in is that model that look industry, And to a very

Unidentified Analyst

And do when Or sales would you in start reps. any currently reps actually up the field? ramping you guys have

Thomas Healy

exactly as the have reps that the selling what then move transacting powertrain right quickly entire we'll are just opposed looking as do vehicle. the as doing -- beginning, We to well sale, mentioned, to the close truck over in I sales -- close entire now to but looking be already

Unidentified Analyst

Thank right. you. Awesome. All

Operator

will There now to I the call turn Thomas closing are further remarks. questions at no time. for this over

Thomas Healy

had And during Thank appreciate Day. joining also call. Investor virtually who in-person attended for everyone or you everyone today's

that couple who watch KARNO. you It's amount you presentation. strongly well go but those channel a to For both our you detail of on a of haven't, long it encourage hours and Hypertruck as the as to great gives solution YouTube powertrain the

for you call. thank joining So today's

Operator

today's conference concludes call. This

disconnect. You now may

Hyliion (HYLN) 9 Aug 232023 Q2 Earnings call transcript