Hyliion, which has completed its reverse merger with a special purpose vehicle earlier this monthThe stock closed the session on Thursday 3.15% to $ 28.27 per share.
“I kind of like the story, and I think it’s worth buying when you get the stock around $ 20, maybe less,” she said “Bad money” Host said. “Please be patient – let it come to you.”
Cramer has been largely skeptical the influx of electric vehicle companies joining forces with blank check companies known as SPACs starting with Nikola in June. Other advertised offers include Spartan Energy Acquisition merges with Fisker and the combination of DiamondPeak and Lordstown Motor.
“This is absolutely insane, and I say this as someone who is really a firm believer in electric vehicles,” Cramer said, noting his support for industry leaders Tesla. “I think fossil fuels are on the way out … but I also think you need to be careful when these relatively early startups are receiving large infusions of money from SPACs.”
The Hyliion Hypertruck ERX
Source: Hyliion Inc.
For Hyliion in particular, Cramer believes there are many positive catalysts for the company developing powertrain systems for hybrid and all-electric trucks. He likes the fact that the hybrid solution, which can be retrofitted to existing trucks, is already on the market and uses the existing infrastructure compressed natural gas. It also owns its battery technology, which is a plus, he said.
“On the other hand, Hyliion isn’t doing anything revolutionary here because we already have trucks that run on natural gas,” said Cramer. “Nobody really likes them except for some of these waste companies.”
Ultimately, however, Cramer said that Hylion’s strategy of focusing on powertrain systems is wise. The company, he said, “found that designing a new truck was a breeze.”
“You already have truck manufacturers with lots of capacity and happy customers,” he said. “They realized that they were better able to simply improve these trucks with a new and improved powertrain than they would be able to start from scratch. That makes sense.”
The company also has plans for the Hypertruck ERX, which will replace the standard diesel engine with an army of batteries that can be charged on-board with tanks of compressed natural gas. In the long term, Cramer noted that Hyliion has shown interest in hydrogen fuel cell technology that the Host is bullish on although it remains in its beginnings.
According to Cramer, the company can sell 4,100 hybrid drives and 2,500 of the Hypertruck ERX systems in 2022 with total sales forecast of $ 344 million. “Very impressive considering they’re only making $ 8 million next year,” said Cramer. “These numbers seem optimistic to me, but if they get close it would be very positive.”
Compared to other early-stage electric vehicle manufacturers, Hyliion “feels much closer to reality,” said Cramer. However, he said investors should be wary of the stock price. It’s his biggest concern right now, he said.
In late September, when the merger with Hyliion was approved by SPAC’s board of directors, Tortoise Acquisition, the stock was trading in the low 50s. Now it’s back below $ 30.
“The damn thing got way too hot for its own good,” he said. “The bottom line? With how these SPAC deals go, I bet Hyliion will have more disadvantages before it hits rock bottom.”