GE Is Taking a Stake in the EV Business With Sale of Technology to Hyliion | GE Message Board Posts

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Msg  7273 of 7562  at  8/26/2022 11:53:33 AM  by

jerrykrause


GE Is Taking a Stake in the EV Business With Sale of Technology to Hyliion

GE Is Taking a Stake in the EV Business With Sale of Technology to Hyliion
 

General Electric is selling generator technology to an electric-vehicle start-up and will become a shareholder of that company in the process.

Thursday, Hyliion Holdings (ticker: HYLN) announced it is buying KARNO generator technology developed by GE (GE). The deal is valued at about $37 million. The conglomerate will receive about $15 million in cash and $22 million worth of Hyliion stock.

Hyliion makes powertrains for heavy-duty trucks. One of its flagship products is a semi-truck, the Hypertruck ERX , powered by batteries and a generator.

That solves a problem with weight. Lithium-ion batteries are heavy, so if a semi-truck carried too many, it wouldn't be able to haul freight. Using a limited number of batteries and putting a generator in the truck to recharge them on the fly is one way to get the benefits of an electric powertrain while keeping vehicle weight down.

"Solving climate change, whether through adopting electric vehicles or reducing emissions from manufacturing sites, requires clean, efficient and dependable electricity," said Hyliion CEO Thomas Healy in a news release. "Hyliion will leverage the KARNO as the next generation generator onboard the Hypertruck, creating a solution that will operate on various fuel sources that are available today."

A generator can run on any fuel, including gasoline, natural gas, and hydrogen, if hydrogen is available and cost effective. The KARNO technology can run on 20 fuels and should be 20% more efficient than current generators.

Hyliion stock got a bump from the deal. Shares were up about 5.2% in Thursday trading while the S&P 500 and Dow Jones Industrial Average were up 0.9% and 0.2%, respectively.

The deal is smaller for GE, of course. Its market capitalization is about $86 billion, so a $37 million sale that brings it a $22 million stake in an EV company can't be said to have moved the needle. Still, shares were up 2.6% in Thursday trading.

So far this year, GE stock is down about 17%, while Hyliion shares have fallen about 36%. Hyliion is a smaller, more speculative business than GE, and inflation and rising interest rates have made investors less enthusiastic about such investments. The Defiance Next Gen SPAC Derived ETF (SPAK), which holds Hyliion stock, is off about 31% year to date.

 


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