Startup Sees Salvation in External-Combustion Engine

MILFORD, OH – When startup Hyliion Holdings paid $35 million to General Electric to purchase its Karno generator technology a couple of years ago, CEO Thomas Healy saw it as a second method to power the company’s Hypertruck ERX natural gas and electric heavy-duty truck.

Now, after mothballing the Hypertruck program and laying off 175 employees late last year, Austin, TX-based Hyliion sees the Stirling engine-based Karno technology as a second path to viability and a potential source of low-emission stationary power for electric-vehicle charging.

EV charging is just one of a plethora of potential uses. Others include creating electricity from oil field flare gases and using methane from landfills as fuel for the generator – converting ozone-eating emissions into electricity. Karno could power buildings, marine vessels and, maybe someday, Hyliion’s shelved Class 8 truck.

Karno Explained

The Karno generator – loosely named for Nicolas Léonard Sadi Carnot, often called the father of thermodynamics – is a linear generator that uses heat to expand working fluid within a hermetically sealed system. The system is pressurized with helium so no fuel or outside air enters the chamber.

“The only purpose for the fuel is to produce heat. So, we have this continuous burn of flameless oxidation of the fuel,” Healy says. “Our goal is (transferring) that heat into the linear generator system that produces pressure changes. That’s what actually moves that shaft back and forth. Our only output of this generator is electricity.”

The linear electric motor, magnets and coils in the middle of the generator move back and forth through the helium to create the power. No oil or other lubricants are needed, extending maintenance intervals. Due to Hyliion’s proprietary flameless oxidation, the Karno emits minimal amounts of carbon dioxide and nitrogen oxides (NOx). Depending on the fuel used, the Karno can have practically zero emissions.

“The (helium) working fluid and all the moving pieces of the engine are completely sealed and isolated from anything that would provide any manner of contaminants (such as) water vapor, particulates or anything similar to that,” says Zac Nagel, principal combustion engineer.

“It’s steady continuous combustion like you might find in a gas turbine. It’s not intermittent or reciprocating like many vehicles or other generator technologies. The combustion process itself is actually quite benign and silent,” he says. “This steady, gentle flow path is what enables a lot of our advantages in terms of emissions and operability.”

One shaft of a Karno generator can create about 50 kilowatts of electricity. As air is pulled from outside, it is sent through a series of heat exchangers. What Hyliion calls the heat recuperator picks up waste heat from the exhaust process and recaptures it inside the system, preventing it from becoming emissions.

Hyliion must meet emissions requirements in each of the markets it is pursuing. Because it no longer has a truck engine program, the 2027 EPA targets for heavy-duty NOx are not an issue. The Karno generator’s fuel testing uses compressed natural gas. Hydrogen is next. It has no CO2 or volatile organic compounds “so that zeros out a couple columns right away,” Nagel says.

At a recent program at its suburban Cincinnati facility, Hyliion shows investors and customers how the technology works, including the extensive use of 3D printing of parts too intricate to be manufactured any other way.

“Take everything you know about how internal-combustion engines work and put that to the side,” Healy tells his audience, speaking above the droning hum of laser-equipped additive-manufacturing machines forming intricately designed components layer by layer from metal powder.

During a demonstration, the 125-kW Karno generator’s main heat exchanger glows orange-hot as the unit creates more than enough electricity to light and power the facility Hyliion leased nine months ago in its all-in bet on stationary generators.

Going for Broke

The Karno purchase from GE in August 2022 was a bold move for Hyliion. At the time, it had generated negligible revenue from a bolt-on hybrid range extender and announced a one-year delay in the Hypertruck program as costs escalated in the post-pandemic supply-chain crisis.

From the tour, it’s apparent that GE’s influence looms large. About a dozen GE engineers, including Hyliion Chief Technology Officer Josh Mook, came to Hyliion with the technology they had been working on for about five years. Their efforts focused on additive manufacturing with the hopes that Hyliion could provide a use. Additive manufacturing is more expensive than computer numerical control (CNC) machining or traditional lathes. Scaling consists primarily of adding machines to increase capacity.

“It’s very different from a conventional engine plant where you have to invest half a billion dollars just to make engine No.1,” Healy says. 

At a rate of about one completed part every two days, Hyliion needs more 3D printers. It is purchasing GE Additive machines – unsurprisingly – for its Austin headquarters with customer trials this year and low-volume manufacturing planned in 2025. 

Hyliion investors and its board encouraged a go-for-broke approach to Karno after the company burned through hundreds of millions of dollars before spiking the Hypertruck program. A stock that traded above $50 a share before its reverse merger with special-purpose acquisition company Tortoise Ecofin in 2020 hasn’t traded above $2 a share since last July.

Healy predicts revenues in the low tens of millions next year if the Karno continues to perform as it has in early trials. It has enough money in the bank to get that far, having reduced its cash burn from $150 million a year for Hypertruck and Karno together to about $40 million a year on Karno alone.

“All the eggs are in this basket right now,” Healy says. “This is the focus of the company.”