UPDATE: Volvo, Westport JV agreement successfully closed

Volvo Group and Westport Fuel Systems sign joint venture agreement Westport’s HPDI fuel system technology can be applied in vehicles with internal combustion engines to replace diesel and other greenhouse gas-emitting fuels. (Photo: Volvo Group)

UPDATED 6/11/2024

Volvo Group and Westport Fuel Systems Inc. have closed and launched a previously announced joint venture (JV) transaction intended to accelerate the commercialization and global adoption of Westport’s High Pressure Direct Injection (HPDI) fuel system technology for long-haul and off-road applications. The companies announced the signing of an investment agreement to establish the JV in March of this year.

The JV will operate as an independent entity, with Westport contributing certain HPDI assets and activities, including related fixed assets, intellectual property and business. Volvo Group acquires a 45% interest in the JV for the sum of approximately US$28 million, plus up to an additional US$45 million as an earn-out, depending on the subsequent performance of the JV.

The HPDI fuel system is a complete system offering OEMs the flexibility to differentiate their biogas, natural gas, hydrogen and other fuel product lines while also maintaining maximum commonality with their conventional products, Westport stated. The technology can be applied in vehicles with internal combustion engines to replace diesel and other greenhouse gas-emitting fuels.

“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, Volvo Group. “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 (Liquified Biogas) applications here and now and is a potential avenue for hydrogen.”

Dan Sceli, CEO & director of Westport Fuel Systems, viewed the closing of the joint venture as an important milestone for Westport and an endorsement of its HPDI technology and fuel system. “Together, we will accelerate the commercial adoption of HPDI for OEMs globally by leveraging the HPDI fuel system to its fullest potential,” he said. “HPDI is uniquely poised to create and implement affordable solutions in hard to abate sectors like heavy-duty transport and off-road applications.”

“This collaboration with Westport is a testament to our shared dedication to sustainability and our belief in the power of partnership to drive industry change,” Stenqvist added. “As we embark on our joint venture together, we are confident that we can bring sustainable solutions forward using the intermal combustion engine running on renewable fuels now and hydrogen in the future.

“We, at Volvo, are committed to driving the transition to decarbonize transportation and this new HDPI joint venture enables us to accelerate the adoption of combustion engines powered by hydrogen and renewable fuels for long-haul and off-road applications in partnership with Westport.”

The JV will be led, on an interim basis, by Dan Sceli, CEO of Westport, in addition to Scott Baker, who will take on the role of vice president, Product Development Technology Officer, and Anders Johansson, who will be vice president and commercial officer. 

The joint venture will operate as an indepent entity will be headquartered in Vancouver, Canada.

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