Terrific. Hi all, thank you for joining us today. Excited to share a little update on Hyliion, or for any of you who are new to the story, thanks for joining as well. So, for those recently joining, we're a company focused on the power generation market. So on the slide in front of you here, you can see what our product looks like. It's those generators that can easily be deployed outside of a facility at an EV charging site, at a data center. And the whole goal of this is you now have the ability to make your own electricity locally as opposed to being dependent on the grid. So these gen sets are designed to be prime power 24/7 operation as opposed to when we say the word gen set, most people think of kind of the emergency backup power. This is really a solution that's enabling distributed power generation. So to kick off today's presentation, wanted to just share a few examples of kind of why is this market relevant, what's happening in this space. So what we're seeing is just there's a tremendous increase in demand for more electricity. You've got applications like EV charging where, you know, one fun statistic there is if you plug in 10 semi-trucks into the grid, those trucks will consume the same amount of power as the entire Super Bowl stadium during game time. You also have data centers which we're actually seeing as probably being the biggest, you know, new consumer of electricity. One of the hyperscalers that we're talking to, you know, they today consume about 6 gigawatts of power but are vocal about the fact that by 2030 they're expecting to increase their power to 40 gigawatts of power. Now, all this is happening while we're also at a point where infrastructure is aging out. If you look at the electrical transmission lines that are in existence in the US, 60% of those are already at life expectancy. So, what all this points to is we need to move to a distributed power generation model where you take a building, a warehouse, a hospital, hotel, and you actually make your own power locally on site as opposed to being reliant on the grid.
So, a little bit background on the company. Thomas Healy, founder and CEO, joined by John Panzer, our CFO. I started the company back in 2015 and took the company public in 2020. We now have headquarters in Austin, Texas. That's where John's sitting today as well as R&D facility in Cincinnati, Ohio, which is what you can see behind me here. And then in the background you can see a couple of variations of the product. 200 kW solution as well as a multi-megawatt solution.
So, to kick things off, just kind of starting to talk about, you know, what markets are we going after? So, there's really five key buckets that we're focusing on. I've talked a little bit about EV charging and data centers. Another area of opportunity is waste gas. So, think of, you know, gas that would normally be flared at an oil and gas site or methane coming off of landfills or dairy farms. We have prime power applications which would be taking commercial buildings and moving them, you know, off of being grid dependent to making their own power locally, as well as marine applications. So, we actually have a development agreement with the Office of Naval Research with the US Navy to look at actually being able to power their vessels off of the Carnot generator. So, a pretty wide breadth of, you know, opportunities here, but what's unique about each one of these is they each have different focus areas of why they're interested in the Carnot generator. So, EV charging is interested in you've got a genset that's immediately deployable. Same thing with data centers. But, data centers are also heavily focused on making sure they have lower emissions. Versus when you look at waste gas, it's more about being able to operate on various compositions of fuel, right? So, if you think about, you know, flare gas coming out of an oil and gas site, the composition of that changes over time, and so your generator needs to be able to run on those various mixtures as well. Versus when you look at prime power applications like a warehouse or facility, it's really about can you provide lower cost electricity than what can be sourced from the grid? And then lastly, in the marine application, it's about low maintenance and having fuel agnostic capabilities. So, all those aspects are actually being able to be provided out of this one solution, the Carnot generator.
So, what is the Carnot? So, it's a linear heat generator. So, you can see a picture of it on the slide. For reference, it's about a 6-ft long shaft there. So, you have four of those shafts stacked together, and that's what comprises the genset or the generator that then gets put into an enclosure to make the full gen set. But, in terms of benefits of the system, so, I mentioned this before, but it's truly fuel agnostic. So, there are over 20 fuels that this system can operate on. It can offer ultra-low emissions. So, think about like NOx emissions would be in the two and a half parts per million versus CO emissions would be in the three and a half parts per million. When you compare this again to like conventional diesel engines, those can be in the thousands of parts per million. So, we have an extremely low emissions profile even when running on conventional fuels like natural gas or diesel. And we're actually able to achieve the, you know, most stringent of California air emissions standards with no aftertreatment system at all. So, this is really an unlock from an emission standpoint. And then, superior efficiency. So, our gen set operates at about a 50% fuel to electricity efficiency. So, to put this into comparison, if you plug into a wall outlet, the US average for efficiency, electricity efficiency is about 36%. So, you know, with the Carnot generator, you now have the ability to make electricity locally at a higher efficiency than what most of the US grid is. It also comes with the benefit of very low maintenance. So, in each one of those shafts, there's actually only one moving part. So when you think about, you know, a deployment of these systems, it's much more similar to how we think about like an air conditioning unit where you put it out back to your facility, it's running all the time, very low maintenance, maybe occasionally you need to refill it with Freon. That's a very similar kind of maintenance cycle as to what we have on the Carnot generator. And then it also offers a benefit of being very low noise levels. Similarly, it's actually kind of a very similar noise level as what an air conditioning unit would be outside of a facility. So, we then take that four-shaft array, and as I mentioned, we put it into an enclosure. So, you can see here on the slide, that that box is comprised of everything from fans and radiators and pumps in order to run the system. But then that product will produce 200 kW of electricity. Now, this is really an equation of you bring fuel in. You can use various fuels as mentioned before. You could use pipeline natural gas. You could use on-site storage of diesel or propane. The generator really doesn't care what fuel you're providing it. And then it takes that fuel and converts it to electricity at the benefits that I mentioned on the slide previously.
So then, as we think about scaling up here, I mentioned the data center market, the oil and gas market. That's where we're seeing a tremendous amount of interest. So, 200 kW really just isn't enough power for them. They're talking about tens or even into the hundreds of megawatts of power need. And so, that's where we'll also be doing an integration of a 2 MW system. Now, what's unique about the way you scale the Carnot generator is that as you want more power, you actually just stack more of those four-shaft arrays together. Very different than if you think about like a diesel engine where you have a 12-L, a 15-L, a 60-L engine, and each of those engines is designed for different power output levels. The Carnot generator is really just a modular approach of you stack more of these 200 kW systems together in order to make the desired power output. So, from a, you know, R&D development standpoint, we really designed the secret sauce, right? The four-shaft array. And then, as we want to scale power levels, you just keep stacking those together.
So, shifting here to a little bit about how this actually works. Usually, the feedback we get from customers is it's like it almost seems too good to be true, right? You've got a system that can run on almost any fuel you give it. It's got better than power plant level efficiencies. Okay, so how does this thing actually work? So, on the graphic here, you can see kind of a cross-sectional view of that system, the four-shaft system. So, we're looking here at one of the shafts. And what's happening is in the orange areas on the outside, that's where we're producing heat. So, what we're doing is we're taking fuel in, we're reacting that fuel through a process called flameless oxidation, and then that produces heat. Now, as I mentioned on a previous slide, this whole generator is powered off of heat. That's actually our fuel source. So, what we do is we take the heat and we transfer it into a sealed working gas. Now, the red and blue areas is where that gas is trapped. And what happens is when you take a gas that's trapped and you heat it up, it wants to expand. And so, you take that heat from the orange area, you transfer it into the red area of the graphic. That gas then expands, and that's what pushes the piston left and right and back and forth, and you have that reaction happening on both sides, and that piston is oscillating back and forth. So, this whole system is driven off of heat as opposed to when you think about like a normal car engine, you're actually exploding fuel, and that's what's pushing the piston back and forth. So, this just inherently gives us kind of a different way of making energy or making power compared to other gen sets. And that's what enables some of those benefits that were mentioned before. So, the unlock here, the type of gen set that I just mentioned, it's kind of foundationally based off of Stirling engine technology. Now, Stirling engines have been around for a couple of centuries. Hyliion's not the inventor of the Stirling engine, but there's often been limitations as to how do you effectively deploy or create that type of gen sets. And that's where we, you know, we've created an unlock here where what we're doing is we're taking additive manufacturing or 3D printing and using that to make many of the key components that go into the gen set and specifically the heat exchangers. So, you can see an example of a heat exchanger on the left hand side of this slide where we're able to really push the boundaries as to how efficient and how well you can transfer heat in between parts and that's what's allowed us to really unlock the potential of Stirling engines. And then on the right hand side of the slide, you can see just what a 3D printer looks like. So, this is actually a picture out of our Austin, Texas facility and you can see a few of the 3D printers lined up there. So, you know, the best way to think about this is we're taking a technology that's hundreds of years old. It's had deficiencies. We're taking new age technology in 3D printing and applying that in order to create an unlock of this Stirling engine technology. And then we've designed, you know, how do you actually create this, package it, and make it a usable gen set solution.
So, then just looking at what are the benefits of the Carnot generator? So, you know, the key things that customers care about is what's the cost of electricity, is this thing going to be high maintenance, low maintenance, what's the emissions profile of it, what's the square footage it's going to take up, and then also what's the upfront adoption cost. So, you can see here kind of how we stack up against the other solutions like other internal combustion engines or fuel cells or microturbines. And you can see in each one of those categories we're either leading or on the upper quartile of performance. So, from an electricity cost standpoint, we've got one of the highest kind of conversions of fuel to electricity. That's what's going to allow you to have low cost electricity as well as coupling that with low maintenance. That'll keep costs down for customers. And then from an emission standpoint, so we do have the ability to operate on fuels like hydrogen and ammonia, which will enable you to have zero carbon emissions. But then we also have the ability to run on existing fuels like natural gas or diesel, which, you know, as mentioned on a previous slide, we're able to bring the CO levels, the NOx levels 98, 99% lower than other conventional gensets. Then from a footprint standpoint, we're best way to think about it is about a third the size of a fuel cell solution and about half the size of an internal combustion solution. And the only technology that really wins in that category or is superior to our footprint is a microturbine. But you can see there are other drawbacks that come with that sort of solution. And then from an upfront cost standpoint, so to kind of give you some benchmarks, the industry's used to internal combustion engines being in that 1,000 to 1,500 per kilowatt. Hydrogen fuel cells are often in the 3,000 to 3,500 per kilowatt, and we're kind of sitting in between those two is the best way to think about our upfront costs. But, as we're talking with customers, I mean, the thing that really matters to them much more so than upfront costs is what's the total cost of operation. What's the payback going to be compared to either grid electricity or compared to internal combustion engines, and that's where we're targeting about a 3-year payback for customers.
So, then just transitioning to a little bit about the company. So, we'll be reporting earnings in the next couple of days here. So, some of this data will be updated shortly. But, as of last quarter, we had about 250 million of available cash on our balance sheet or capital on our balance sheet. Operating expenses is in about the 40 million per year range with then capital expenses of about 15 million. And then as we look at next year, we do expect a moderate increase in our burn rate, but not a substantial change. And then, what we've laid out to the market is really three key milestones over the next couple of years. So, the first is that we're on track to start customer deliveries by year end here. So, just weeks away. The next is we're targeting having low double-digit millions of revenue next year. And then following that by early 2026, we plan to be at a position where we'll be break-even or gross margin neutral on the product. So, as you think about kind of what's ahead, those three milestones are really the key things that we're encouraging investors to track. And then just to touch on if any of you have been following our story for a while, you might be aware that we actually were a company focused on the EV powertrain space. And just about a year ago now, we made the decision to pivot out of that space and focus on the Carnot generator and the power generation sector. And you can see on the right-hand side of the slide here just a little bit more than a 1-year look back at kind of where Hyliion was trading and some of the other EV stocks were trading. And you can see that, you know, the EV space has continued to have a downward trajectory in stock performance versus thankfully, you know, Hyliion has really kind of broken away from the pack and has started trading more positively. So, as we look back at a year ago when we made the decision to pivot away from powertrains, you know, we were very confident that that was the right move and very pleased with the path and trajectory we're now on.
