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Westport attracts $37.7M investment from Volvo Group

Vancouver firm's alternative fuel tech focuses on trucking, long-haul transport sectors

A gas-powered truck that is an example of a vehicle that could use Westport's HDPI system. (Courtesy Volvo Group)

Vancouver-based Westport Fuel Systems Inc., a designer and producer of alternative fuel systems for transportation, has received a $37.7-million investment from Volvo Group.

The intent for a joint venture was formalized in July 2023, with the aim of accelerating the “commercialization and global adoption of Westport's HPDI fuel system technology for long-haul and off-road applications,” the companies state in a release.

Swedish automaker Volvo will acquire a 45 per cent stake in the joint venture for the initial $37.65 million, with an additional $60.66 million included in an earn-out clause depending on the performance of the partnership. Westport will contribute HPDI assets and activities such as related fixed assets, intellectual property and business.

The joint venture is expected to be operational after the transaction closes, which is anticipated in Q2 according to Westport.

"We are excited to execute this agreement and build on our success with the Volvo Group and our HPDI technology. We are motivated to keep innovating and investing in strong business relationships with leading organizations that share our goals, of which Volvo Group is certainly one," Dan Sceli, CEO of Westport, said in the release.

Westport’s HDPI and hydrogen offering

The company’s HDPI - High Pressure Direct Injection – allows internal combustion engines to run on liquified natural gas or hydrogen rather than diesel. It targets long-haul trucking and other high-load, long-haul sectors for the technology.

The HDPI for liquified natural gas is said to cut tailpipe carbon dioxide emissions by 20 per cent compared to diesel, and not require any change to the vehicle or engine architecture.

HDPI for hydrogen almost eliminates carbon dioxide emissions compared to diesel. It also does not require changes to the engine manufacturing process, and produces 20 per cent more power, Westport states on its website.

HPDI is being tested in a project with a global supplier of power solutions for marine applications using methanol, and by a heavy truck manufacturer to meet Euro 7 emissions requirements for heavy-duty vehicle applications.

In Westport’s Q3 2023 financial results, the company said it also entered new markets with HPDI’s hydrogen variant for its first proof-of-concept project for locomotives.

Westport holds out great promise for the technology. The company forecast strong performance for Q4 2023 and looking ahead to the 2024 financial year as it recorded a quarter of HPDI fuel system sales with the launch of Volvo’s extended range option.

In February 2022, Westport joined the World Hydrogen Council to promote awareness of hydrogen fuel as a tool for decarbonization. Westport’s CEO David M. Johnson told Sustainable Biz Canada this entailed demonstrating the application of hydrogen in HDPI.

For the hydrogen space, Westport also offers hydrogen fuel system parts such as tank valves and pressure regulators for use in transportation such as cars, buses and trains. In the Q3 2023 financial report, Westport said it “sees continued strong long-term demand in our hydrogen business.”

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