Hyzon Motors Ships Hydrogen Fuel Cell Trucks

Hyzon Motors Accelerates Expansion Following Merger

Hyzon Motors, a company specializing in hydrogen-powered heavy-duty trucks, announced on Wednesday a significant increase in operational activity following its merger with Decarbonization Plus Acquisition Corp. This includes the commencement of shipments to customers located in Europe.

Second Quarter Performance and Future Outlook

During its second-quarter earnings report, released Wednesday, the company detailed preparations for initiating initial customer trials within the United States. Hyzon is relying on substantial capital—exceeding $500 million—obtained from the merger, alongside increasing customer orders, to achieve positive cash flow.

Financial Status and Investment

Currently, Hyzon has not yet generated substantial revenue. The company reported a net loss of $9.4 million for the quarter, with $3.5 million allocated to research and development. Adjusted EBITDA was negative at $9.1 million.

However, Hyzon maintains a strong cash position of $517 million, which CFO Mark Gordon stated is sufficient to reach free cash flow by 2024 without requiring further equity sales, as discussed during the second-quarter earnings call.

Hydrogen Infrastructure Development

Beyond the production of hydrogen fuel cell powertrains, Hyzon is actively investing in the development of hydrogen fuel production hubs. These hubs are considered vital for the widespread adoption of the technology.

In April, a memorandum of understanding (MOU) was signed with Raven SR, a renewable fuels company, for the potential establishment of up to 100 hydrogen production hubs. Gordon confirmed that the initial two hubs will be situated in the Bay Area.

Vehicle Deliveries and Order Growth

The company anticipates delivering 85 fuel cell vehicles by the end of the current year, with initial revenue expected to be recognized in the next quarter.

The value of orders and non-binding memoranda of understanding has increased to $83 million, up from $55 million in April. However, it’s important to note that a significant portion of these agreements are non-binding.

Technological Adoption and Customer Education

Hyzon acknowledges a challenge in technological adoption, as many potential customers lack prior experience with hydrogen fuel-cell vehicles.

CEO Craig Knight emphasized, “Many customers are getting their hands on the first fuel cell vehicles they’ve ever seen in the next six to 12 months.” This represents a crucial validation process, requiring customers to gain confidence in the vehicles’ performance within their specific operational contexts.

Accelerated Fleet Conversion

Knight observed that the timeline for fleet conversion is shortening, particularly in Europe, where hydrogen fuel availability is more established.

“I actually think that’s compressing,” he stated, referring to the time previously estimated for transitioning from initial trials to full fleet conversion—a process that was initially projected to take 12 to 18 months.

Focus on Back-to-Base Operations

The company’s current strategy prioritizes back-to-base operations over long-haul freight transport. The latter necessitates a more comprehensive hydrogen refueling infrastructure.

The upcoming U.S. customer trial with Total Transport Services Inc. exemplifies this approach, utilizing a high-utilization truck that will primarily rely on a single refueling station in Wilmington, California. “It’s a good application for hydrogen, and we’re not introducing the complication of having to find hydrogen stations across the country,” Knight explained.