Dive Brief:
- Hydrogen fuel cell tech company Hyzon Motors is refocusing its development to the waste industry and core markets in North America, the Illinois-based startup announced Monday in a news release.
- The business had been gearing itself toward a global presence that included not just North America but also Europe, Australia and New Zealand. In Q1, the company also posted a surge in quarterly revenue driven by coach bus sales.
- Hyzon said it will “explore a full range of strategic options for the Company, which could potentially include a sale of the Company and/or a divestiture of its Europe and Australia/New Zealand businesses and subsidiaries, amongst other alternatives” as well as a potential workforce reduction.
Dive Insight:
Amid its international reach, Hyzon recently reported its largest-ever revenue for a quarter, describing its Q1 2024 result as a financial milestone.
The company posted $10 million in quarterly revenue compared to none in the prior year period. That was primarily due to deploying 10 coach buses to Fortescue Metals Group in Australia in 2023, Hyzon CEO Parker Meeks said on an earnings call last month.
But following a review of its operations, Hyzon wants to focus its financial resources and investments in the North America market instead "as it prepares to launch its significant large fleet trial programs on both platforms in the U.S. and Canada this summer," the company said.
These trials include a focus on the waste industry, following Hyzon's recent partnership with New Way Trucks to debut what they say is North America’s first electric refuse truck powered by hydrogen fuel cells. California-based Recology will demo the truck, with commercial deployments slated for 2025.
Hyzon is not alone in adjusting its market development plans. A year ago, competitor Nikola shifted its presence away from Europe, selling a stake in a joint venture with Iveco Group for $35 million and announcing plans to concentrate on North America.
In a similar move in 2023, Hyzon began exiting from its commercial market presence in China, citing concerns over economic challenges and risks.
The company is very focused on its balance sheet, using its resources to continue making progress to show the business’ value and demonstrating to strategic partners “that we are uniquely ahead,” Meeks told Trucking Dive in an interview in May.
Hyzon also noted progress in reducing expenses as it seeks to transition to more reliable revenue. Quarterly net cash burn in Q1 was $29.6 million, according to a quarterly earnings presentation, and an adjusted metric put that at $24 million.
The adjusted metric excluded two significant costs: about $2.9 million in proceeds from the sale of its upstate New York facility and a Securities and Exchange Commission settlement installment of $8.5 million. The SEC alleged last year that Hyzon misled investors, but in a deal that excluded blame, the company settled for $25 million.
Factoring in those exclusions, Hyzon had its “lowest quarterly net cash burn over the last 10 quarters,” CFO Stephen Weiland said on the earnings call.
Cash and cash equivalents were $82.6 million as of March 31, per the earnings presentation. Meeks told Trucking Dive that means the company has enough cash for the rest of the year, and the company is also seeking to raise strategic capital in parallel.
