XL Hybrids Recharges with $4M to Expand Vehicle Powertrain Tech
The broader American clean energy tech sector has been a real bummer over the past few years, with shrinking government support and big-name flameouts like A123 Systems.
Tod Hynes, president and founder of Boston’s XL Hybrids, wants you to know that those ills haven’t been affecting his slice of the business.
The company, founded by a group of MIT grads in 2009, produces hybrid electric powertrains for commercial vehicles—typically the trucks and vans you might see zipping up to loading docks somewhere in the city.
The systems include batteries, an electric motor, and control software. They give workhorse vehicles a touch of the technology famililar to Toyota Prius drivers: The batteries capture energy expended when the vehicle brakes, storing that juice in the batteries so it can be sent back to the drivetrain for a boost when it’s time to accelerate again.
That helps save fuel, since less needs to be burned to get the wheels back in motion—the startup says about 20 percent less fuel is burned in urban driving when one of its systems are being used.
Hynes also says the XL Hybrids systems can supply up to 80 percent more torque to the vehicle’s driveline when they kick in, which means that commercial fleet owners can actually downsize the engines they buy for new trucks and vans.
It appears that sales pitch has been winning over some commercial vehicle owners. XL has recently landed another $4 million in private investment.
The backers weren’t identified by name, but XL says its previous investors were back for about half of the company’s new investment round, which is its Series B. The startup had previously raised about $4 million from angel investors and the Massachusetts Green Energy Fund.
The money is intended to help the fledgling company, which still has about 10 employees, ramp up its production and sales to customers across North America. With its previous funding, XL says it was able to get systems installed with “multiple Fortune 500 companies” who showed more appetite for the technology.
And those were real sales, not subsidized gimmes, Hynes says.
“They weren’t giveaways. There were definitely customers asking for that, but we would only sell. And there was no government buydown to reduce the cost of the system,” he says. “We don’t rely on incentives that are maybe going away, or some other kind of giveaway.”
Another positive sign for the young company is that it’s made the transition from retrofitting older vehicles into “upfitting” new trucks and vans with its hybrid drivetrains. That’s the kind of market shift XL Hybrids was hoping to capture more than a year ago when we last checked in on their progress.
“Most of our sales to date have been on new vehicles,” Hynes says, and XL also has partnered with another company to help get the “upfitting” work spread more broadly and completed more quickly.
Hynes wouldn’t disclose revenues, but they’re likely still modest—he joked that he could give me a revenue growth projection for this year, but it would be one of those absurd 1,000 percent-type figures that very young companies sometimes trot out.
So while the formerly high-flying Massachusetts clean-transportation company A123 Systems fights for a new lease on life, it looks like there could be a nice niche to grow for smaller, more deliberate players like XL Hybrids.