Utilizing HPDI Technology to Accelerate the Decarbonization
Efforts of Global OEM Customers
VANCOUVER, BC, July 19, 2023 /PRNewswire/ -- Volvo
Group (VOLVb.ST) and Westport Fuel Systems Inc.
(TSX: WPRT) (NASDAQ: WPRT), a leading supplier of advanced
alternative fuel delivery systems and components for the global
transportation industry, have signed a non-binding letter of
intent to establish a joint venture to accelerate the
commercialization and global adoption of Westport's HPDI™ fuel system technology for
long-haul and off-road applications. Volvo and Westport share the vision of creating
sustainable transport solutions to accelerate the decarbonization
efforts of global trucking, engine, and equipment manufacturers for
their customers and society.
Westport's HPDI fuel system is
a high-performance solution supporting significant carbon
reductions in hard to abate sectors like heavy-duty and off-road
mobility. HPDI enables the world's trucking and off-road
equipment manufacturers to address the challenges of meeting the
regulatory requirements of Euro 7 and
the US EPA while offering end users affordable options that are
powered by carbon neutral fuels like biogas, zero carbon fuels like
green hydrogen and other renewable fuels. While Volvo will be a key
customer of the joint venture, the joint venture's mandate will be
to enhance commercialization of HPDI through the addition of new
trucking and equipment manufacturers as customers.
Westport will contribute
current HPDI assets and activities including related fixed assets,
intellectual property, and business into the joint venture. Volvo
will acquire a 45% interest in the joint venture for the sum of
approximately US$28 million
(approximately SEK 300 million) plus
up to an additional US$45 million
(approximately SEK 500 million)
depending on the performance of the joint venture.
Volvo's ambition is to reach net-zero greenhouse gas
emission-enabled products, solutions, and services by 2040.
Volvo believes that the future will demand diverse propulsion
solutions for diverse applications to meet customers' needs and
environmental demands. Volvo advocates for a three-pronged
approach: battery-electric, fuel-cell electric and internal
combustion engines.
"Decarbonization with internal combustion engines running on
renewable fuels, especially with HPDI, plays an important part in
sustainable solutions. 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," said Lars Stenqvist, Chief Technology Officer
of Volvo.
"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," said 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."
Completion of the joint venture is conditional on the successful
negotiations and execution of a definitive investment agreement,
joint venture agreement, supply agreement and development
agreement. The joint venture is expected to launch in the first
half of 2024.
About HPDI
HPDI is the most cost-effective way to reduce
CO2 in long-haul trucking and other high-load and
off-road applications. Westport's
HPDI fuel system is a complete system offering OEMs the flexibility
to differentiate their biogas, natural gas, hydrogen, and other
fuel product lines easily while also maintaining maximum
commonality with their conventional diesel fueled products. The
greenhouse gas emitting fuels like diesel can be replaced with
carbon neutral or zero carbon fuels like biogas or hydrogen while
maintaining the durability, affordability, efficiency, and
performance characteristics that have come to be associated with
the diesel engine. The HPDI fuel system consists of a fully
integrated "tank to tip" solution, based on diesel technology. At
the heart of the engine is a revolutionary patented injector with a
dual concentric needle design. A small amount of pilot fuel (which
can be diesel fuel or a biodiesel renewable fuel) is injected into
the cylinder prior to the gas, to initiate the ignition.
Engines can achieve higher horsepower and torque by using direct
injection and relying on high pressures in the combustion chamber
for ignition. Thus, the characteristic of the engine using an HPDI
fuel system is very similar to a diesel engine. Designed for heavy
long-haul and distribution operations as well as off-road
applications like mining, rail and marine, HPDI fuel systems offers
an alternative with low climate impact while meeting the highest
industry standards for performance, fuel efficiency and operating
range required for heavy-duty transport. A truck equipped with the
HPDI system is an ideal solution for fleets wanting to reduce their
fuel costs and offer decarbonized regional and long-distance road
transport solutions to their customers with no compromise on
vehicle performance. For additional information please visit
our HPDI website at https://wfsinc.com/technology/hpdi.
About Westport
At Westport, we are driving
innovation to power a cleaner tomorrow. We are a leading supplier
of advanced fuel delivery components and systems for clean,
low-carbon fuels such as natural gas, renewable natural gas,
propane, and hydrogen to the global transportation industry. Our
technology delivers the performance and fuel efficiency required by
transportation applications and the environmental benefits that
address climate change and urban air quality challenges.
Headquartered in Vancouver,
Canada, with operations in Europe, Asia,
North America, and South America, we serve our customers in more
than 70 countries with leading global transportation brands. At
Westport, we think ahead. For more
information, visit www.wfsinc.com.
Forward Looking Information
This press release contains "forward-looking information"
within the meaning of applicable securities laws ("forward
looking statements"). Forward looking statements are frequently
characterized by words such as "expect", "intend", "may", "will",
"potential", "proposed" and other similar words, or statements that
certain events or conditions "may" or "will" occur. Forward-looking
statements made in this press release include statements regarding
the timing and completion of the referenced joint ventures and the
definitive agreements with respect to the same. These
forward-looking statements are neither promises nor guarantees but
involve known and unknown risks and uncertainties and are based on
both the views of management and assumptions that may cause
Westport's actual results, levels
of activity, performance or achievements to be materially different
from any future results, levels of activities, performance or
achievements expressed in or implied by these forward looking
statements. These risks, uncertainties and assumptions include
those related to the success and completion of the engine
development program, the pricing and availability of hydrogen as a
transportation fuel, our ability to address technological
challenges, the general economy, solvency, governmental policies
and regulation, fluctuations in foreign exchange rates, as well as
other risk factors and assumptions that may affect our actual
results, performance or achievements or financial position that are
described in Westport's continuous
disclosure filings available under Westport's SEDAR profile at www.sedar.com and
under Westport's EDGAR profile at
www.sec.gov. In addition, the effects and the impact of the
COVID-19 outbreak, and supply chain disruptions are difficult to
predict at this time and could cause actual results to differ
materially from the forward-looking statements contained herein.
Readers should not place undue reliance on any such forward-looking
statements, which speak only as of the date they were made.
Westport disclaims any obligation
to publicly update or revise such statements to reflect any change
in its expectations or in events, conditions or circumstances on
which any such statements may be based, or that may affect the
likelihood that actual results will differ from those set forth in
these forward-looking statements except as required by law.
Media Relations, T: +1 947-339-8097,
E: media@wfsinc.com; Investor Relations, T: +1
604-718-2046, E: invest@wfsinc.com
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