MAUMEE, Ohio—Dana Inc., like many automotive suppliers, is being proactive about the change it sees on the horizon.
Electrification is driving the automotive suppliers to partner with new companies to enhance their knowledge of electric batteries, which is the driving force behind Dana taking an equity position as a lead investor in Hyliion Inc. Financial terms were not disclosed.
Hyliion develops intelligent, electric-hybrid architectures for Class 8 vehicles that can be installed on new trucks or retrofitted on existing trucks. Mark Wallace, president of Dana commercial vehicle driveline technologies, will become a member of Hyliion's board of directors.
"We've been working with Dana as a supplier for about three years now," Hyliion CEO Thomas Healy said. "As we've been getting closer and closer, and as Dana made more of those investments and acquisitions, it's gotten to a point where when you bring these two organizations together we now have a complete systems approach for electric and hybrid vehicles."
Dana said its investment is another step in a number of strategic transactions to position it as the leader in E-propulsion. It's been busy on that front, most recently acquiring a controlling interest in TM4, a Canadian electrification company, and agreed to buy the drive systems business of Oerikon Group, a Swiss-based engineering and technology company.
The firm has made four similar deals in the past three years and came close to acquiring England-based GKN. Melrose Industries outbid Dana in a hostile takeover.
"Dana has been in electrified propulsion systems for quite some time here," said Steve Slesinski, head of product planning for Dana's commercial vehicle operations. "We believe the Class 8 market will migrate toward a hybrid solution like Hyliion developed. We've positioned our electrified propulsion systems for all class of vehicles, specifically for on-high line haul."
Based in Maumee, Dana employs nearly 36,000 people in 33 countries with $8.1 billion in sales for 2018. Hyliion was founded in 2015 by Healy, who saw an untapped opportunity within the trucking segment while studying for his master's degree in mechanical engineering at Carnegie Mellon University. He wanted to know why passenger vehicles had adopted hybrid technology, but semi trucks didn't, especially because those vehicles cover upwards of 120,000 miles each year.
"Fuel is the number one or two expense in a fleet right now," Healy said. "When you can reduce how much fuel they're using, it makes a huge impact on the profitability on the fleet, or the amount they can pay drivers. It adds a new element of cost savings to the industry."
Healy started the company in Pittsburgh, won money through business plan competitions and recently moved its headquarters to an 80,000-sq.-ft. facility in Austin, Texas. He said the primary driver behind the move was to find new talent and capitalize on the city's strong startup market.
The firm operates a service and installation center in Pittsburgh and a battery team in California. It employs about 60 people. Healy said Hyliion has about 75-100 fleets that have reached out to it asking to be early adopters of the firm's hybrid-electric technology.
Slesinski said vehicles that are traveling 400-600 miles a day will see a benefit from a hybrid system, but not necessarily a battery electric system as that would mean significant weight increases from the additional batteries required to power a Class 8 vehicle.
"We're seeing the shift happen now," Healy said. "We're starting to ship early product to customers and the demand is greater than what we're able to supply at this point. They know the trucking industry is shifting toward an electrified mindset. They're looking at what solutions are available now and if it's something they can implement today. That's where our technology comes into play."
Under the agreement, Dana said it becomes Hyliion's source for traditional driveline components, as well as fully integrated E-axles—which includes motors, inverters, controls, gearboxes and thermal-management technologies.
Hyliion produces the batteries and software needed for electric/hybrid solutions, and through Dana's other acquisitions the firm can produce smaller motors and compressors to provide customers a complete system.
"We can collaborate together and design a full system with all the engineering capabilities and resources working together," Healy said.