Thomas Healy, CEO of Hyliion.
Courtesy Hyliion
If all goes according to plan, Thomas Healy, 28, will become America’s youngest self-made billionaire next week when shareholders of publicly traded Tortoise Acquisition Group vote September 28 to acquire Hyliion, the Austin-based heavy-duty electric truck company that Healy founded. After that, the ticker symbol will change from SHLL to HYLN, and the new company will get $560 million cash with which to build out Healy’s vision for the future of electrified heavy duty trucks.
Spokespeople for Tortoise, a special acquisition corp launched in 2018, insist that shares of SHLL, at $42 today (up fourfold since June), are trading on a “pro forma” basis — as if the deal were already done. Assuming this is a fait accompli, and given 161.6 million pro forma shares outstanding, the implied equity market cap of the new Hyliion comes to an impressive $6.7 billion. According to SEC filings, Healy will be the biggest shareholder, with 22.9% of the company, or 34.97 million shares, worth nearly $1.5 billion.
He may not be as slick as the other billionaire electric truck impresarios Elon Musk or Nikola’s disgraced former CEO Trevor Milton, but Healy appears to already have one up on both Tesla and Nikola when it comes to getting revolutionary tech onto the road. There are already 20 trucks operating with Hyliion’s electric powertrains, built via ventures with Dana Corp. and Volvo. Tesla said this year it was delaying production of its Semi until 2021. Shares in Nikola meanwhile have collapsed from the $70s to less than $20 amid fraud allegations and the departure of Milton.
Which leaves Healy as the great new hope for electrifying Class 8, long-haul semi trucks. How’d he do it? “I’m a gearhead, I grew up racing,” says Healy, who competed as a teenager at a national level, racing cars and go-karts. He learned the mechanics behind the machines, and began devising electric drivetrains in his dorm room at Carnegie Mellon, where he was also starting punter for the CMU Tartans football team. Studying mechanical engineering, Healy developed the “e-axle”—that’s an electrified axle, powered by lithium-ion batteries, that could be incorporated into the drivetrain of a traditional Class 8, long-haul truck.
The e-axle could be retrofitted onto old trucks, or built into new ones. The benefits were clear—the e-axle would provide a helping hand, adding power and torque that allowed the diesel block to work more efficiently, improving fuel mileage and lowering emissions. Naturally, the system also captures power via regenerative braking, which given the mass of a semi-truck can be substantial — batteries have to be able to absorb 5 kilowatthours of power from braking on a steep hill, then turn around and feed that power back to the drivetrain during acceleration. In 2017 Forbes named Healy as a finalist in our annual 30 Under 30 project.
Healy’s e-axle evolved into a complete drivetrain system that Hyliion calls the Hypertruck ERX. Replacing the diesel engine is a bank of electric batteries, which are charged via onboard generators that run on tanks of compressed natural gas. Healy’s approach contrasts with the field’s first movers, including Tesla and its all-electric, battery-centric approach, as well as Nikola, which aims to power its batteries using hydrogen fuel cells. Why reinvent the wheel, he says, when a CNG-battery hybrid could take advantage of existing filling stations, and avoid hours of battery recharge time? Furthermore, the combo of a CNG generator plus a modest load of batteries gives the truck long range without having to compensate for massive battery weight. Using CNG instead of diesel reduces carbon emissions roughly 25%.
Healy says he decided early on there was no upside in setting out to design an all-new truck from the ground up. “Do you want engineers designing the hinge or the latch or do you want them designing the battery management system and the algorithm.” Existing truck makers already had big factories and happy customers. “The goal was to be able to allow them to still buy the truck they already know and love and have it with a brand-new powertrain that will really revolutionize their logistics,” says Healy, 28.
There are already trucks that run on compressed natural gas of course, but they’re for lighter loads, and underpowered relative to Class 8 long-haul semi-trailers. Hyliion’s powertrain offers more horsepower and torque and promises 0-60 mph in 20 seconds while hauling 80,000 lbs.
Automotive parts giant Dana Inc. in March 2019 made an equity investment into Hyliion, and together they are manufacturing and marketing the device to Dana’s slate of customers, including truck giants Volvo, Navistar and Peterbilt. Today truck makers install engines from Cummins and transmissions from Allison. Hyliion hopes to someday join that echelon. First large deliveries of the Hypertruck ERX could come in 2021.
Vincent Cubbage, CEO of TortoiseCorp, picked through 200 startups while looking for one to back with the special purpose acquisition company (or SPAC) his team set up in 2018. “We saw a lot of aspirational business plans… so far away from commercial,” he says. A Tortoise private equity fund will end up with 8.7% of Hyliion, or 12 million shares, worth $540 million as of today. Other big winners include Howard Jenkins, of the billionaire Publix supermarket fortune, whose Axioma Ventures holds about 13% of the pro forma Hyliion equity, worth about $700 million. Board members include Andy Card, former chief of staff for George W. Bush and ontime CEO of the American Automobile Manufacturers Association.
Once the deal is finalized and the ticker symbol changes, more Hyliion shares will hit the market, roughly double the 23 million share float today. Meanwhile, total shares outstanding will swell to 161 million. At $42.12 per share today (up fourfold since June) that implies a market cap of $6.7 billion, and an implied fortune of roughly $1.5 billion for Healy. Hyliion will get $560 million of cash in the deal, to invest in rolling out product.
He joins some illustrious company among the nation’s youngest self-made billionaires; John Collison, cofounder of Stripe, and Evan Spiegel of Snapchat are both 30. And then there’s the curious case of makeup mogul Kylie Jenner, who at age 22 has been on and off our list in the past year. Recall that Mark Zuckerberg vaulted to that status at age 23 with Facebook.
With his shares subject to lockup, Healy can’t sell shares for at least two years. Investors will be expecting a lot from him in that time. Hyliion in SEC filings says it anticipates $8 million in revenue in 2021, growing to $344 million in 2022 and $1 billion in 2023, with profits to follow. Ryan Laskey, SVP of commercial vehicle drive systems at Dana, says he’s been impressed at Healy’s commercial focus. “He gives the customer something they don’t even know they want yet.”
