A non-binding letter of intent has been signed by the Volvo Group and Westport to establish a joint venture (JV) to accelerate the commercialization and adoption of Westport’s High Pressure Direct Injection (HPDI) fuel system technology for long-haul and off-road applications.
Westport’s HPDI fuel system enables manufacturers within hard-to-abate sectors – such as heavy-duty and off-road mobility – to address the challenges of meeting Euro 7 and US EPA regulatory requirements. The solution also offers end users options that are powered by carbon-neutral fuels such as biogas and zero-carbon fuels like green hydrogen.
Despite Volvo being a key customer of the JV, the companies’ aim is to improve commercialization of HPDI by acquiring new trucking and equipment manufacturers as customers.
As part of the JV, Westport will contribute its current HPDI assets and activities including related fixed assets, intellectual property and business. Under the agreement, Volvo will acquire a 45% interest in the JV for approximately US$28m, with plans for an additional US$45m if the JV performs well.
“Decarbonization with internal combustion engines running on renewable fuels, especially with HPDI, plays an important part in sustainable solutions,” said Lars Stenqvist, chief technology officer of Volvo.
“HPDI has been on the road in Volvo trucks for over five years and is a proven technology that allows customers to significantly reduce CO2 emissions in LBG (liquefied biogas) applications here and now and is a potential avenue for hydrogen.”
“Westport is advancing fuel system solutions to help our customers affordably address the most pressing challenge of carbon reduction, while continuing to utilize existing
manufacturing infrastructure,” added David Johnson, chief executive officer, Westport.
“The joint venture with Volvo is a natural extension of both companies’ commitment to accelerating global carbon reduction and we are proud to partner with such a bold supporter of the future of the internal combustion engine.
“Combining our expertise strengthens HPDI’s position in the market and underscores Westport’s commitment to developing affordable fuel system technology that supports significant CO2 reductions in hard-to-abate sectors like heavy-duty transport and off-road applications, including a pathway to power equipment with zero-carbon fuels like hydrogen.”
It is anticipated that the JV will launch in the first half of 2024, subject to successful negotiations and the execution of all relevant agreements.
