MIT-born XL Hybrids poised for growth

Focus on fuel-efficient commercial trucks attracts Fortune 500 companies seeking savings

February 3, 2014

XL Hybrids president Tod Hynes, SB ’02, with one of his company’s retrofitted hybrid electric vans

XL Hybrids president Tod Hynes, SB ’02, with one of his company’s retrofitted hybrid electric vans

The electric vehicle business has its naysayers, and more than a few once-promising startups lay as wrecks on the side of the road, but one MIT-bred company is poised to pass the failures, thanks to a sharp focus on the large commercial vehicle market.

Tod Hynes, SB ’02, quit a steady job at the height of the financial crisis in 2008 to launch XL Hybrids, which retrofits commercial trucks with a fuel-saving hybrid electric powertrain. As 2014 begins, the Boston-based company counts FedEx and Coca-Cola among its customers and is on track to expand this year.

Hynes is past second-guessing his decision to leave a secure job to launch a company, confident that years spent in product development and establishing complex supply chains has XL Hybrids on track to soon have thousands of trucks on the road.

XL Hybrids builds a hybrid-electric powertrain for large commercial vehicles, an $8,000 alteration that can reduce fuel consumption by 20 percent—a big number for vehicles that travel 20,000 miles or more a year at 10 to 20 miles per gallon. An XL Hybrids installation adds an electric motor with an additional 220 ft-lbs torque behind the transmission and a battery to store energy captured during braking that can then be delivered back to the motor during acceleration.

In announcing the delivery of 100 new vehicles with the XL Hybrids powertrains last December, Coca-Cola touted it as part of the company’s goal to reduce carbon emissions by 25 percent by 2020, estimating a reduction of 4,000 tons of carbon dioxide during its vans’ 10-year lifespan.

Asked about high-profile failures in the electric vehicle market, Hynes said many companies sought too broad a solution and offered too expensive a product. Fuel is a numbers game, he said, and he set his sights on affordable solutions where the greatest savings could be achieved.

“We started with a high-level thesis that there was an opportunity to start with the problem—customers that drive lots of miles per year, use a lot of fuel, and do lots of stop and go driving,” Hynes said.

“A lot of the industry was focused on trying to make a 50 mpg vehicle get 100 mpg, but that doesn’t save a lot of fuel,” Hynes said. “It sounds impressive, but you’re only saving one gallon every 100 miles. But if you take a garbage truck and take it from one to two miles per gallon, you’ve just saved 50 gallons of fuel every 100 miles. It’s the low mpg vehicles that use a lot of fuel, and that’s where the opportunity is for good economic decisions.”

“If you have lower cost technology and you can provide a good economic proposition to the end customer—because it’s really a commodities business, it’s all about the numbers—if those two things come together you can have a good business that can grow and have a large impact.”

Though XL Hybrids can retrofit vehicles already on the road, most of its clients are buying brand new trucks and including the XL Hybrids technology during custom installation for the vehicle’s specific tasks. The $8,000 alteration can lead to additional savings by downsizing from six liter engines to 4.8 liter engines without loss of driving power.

“Electric drives are going to have a massive impact on the transportation industry and in oil consumption in many different forms,” Hynes said. “No matter what, this is going to happen, and we’re in a good position to do it.”

Currently, the company can turn Ford and Chevy vans into hybrid vehicles, but will be soon be adding additional makes and models based on customer demand.

“For about $10 million [in funding], we developed a hybrid powertrain and achieved an installation rate for about 1,000 vehicles a year, and validated the technology, performance and—most importantly—established a value proposition for Fortune 500 companies,” to use the technology, Hynes said.

From undergrad to lecturer, a career with MIT

Hynes credits MIT’s entrepreneurial culture and network of connections as essential to the formation of XL Hybrids’ business model. He is a lecturer at MIT Sloan, where he teaches Energy Ventures. In 2008, he founded the MIT Clean Energy Prize with Bill Aulet, managing director of the Martin Trust Center for MIT Entrepreneurship. Now in its seventh year, the contest is a catalyst for energy entrepreneurship.

Aulet, a member of the XL Hybrids board of directors, introduced Hynes to XL Hybrids co-founder Clay Siegert, who studied engineering and supply chain management at MIT. Chief Technology Officer Edward Lovelace holds a bachelor’s degree, two master’s degrees, and a PhD from the MIT School of Engineering.

Hynes first came to MIT as an undergraduate. He worked in distributed power generation with a number of different technologies—wind, flywheels, solar—and was drawn to the potential of wind power, eventually working as director of alternative energy for Citizens Energy for five years, where he launched the company’s wind development business.

“The biggest advantage MIT provides is an ecosystem where you can try something new, or try something in a different way, and have access to a broad set of skills,” Hynes said. “PhDs in material science, with engineers, people with a good policy background, finance background, a real breadth of skillsets, depth of skillsets. [It’s] an overall culture that supports trying to make something new.”