Gothenburg, Sweden- VolvoGroup., has finalized an agreement, following a previously declared Letter of Intent, with Westport Fuel Systems Inc to establish a joint venture aimed at accelerating the commercialization and global acceptance of Westport’s High Pressure Direct Injection (HPDI[TM]) fuel system technology. This technology targets long-haul and off-road applications, marking a significant step towards reducing greenhouse gas emissions.
The closure of this joint venture is contingent upon various conditions, including regulatory and governmental approvals. It is expected that the joint venture will commence operations in the second quarter of 2024, pending formal closure.
High Pressure Direct Injection (HPDI) represents a crucial advancement in fuel system technology, offering the potential to substitute greenhouse gas-emitting fuels such as diesel with carbon-neutral or zero-carbon alternatives like biogas or hydrogen.
Lars Stenqvist, Chief Technology Officer of the Volvo Group, emphasizes the importance of decarbonization through internal combustion engines running on renewable fuels, particularly highlighting the role of HPDI. With over five years of deployment in Volvo trucks, HPDI has demonstrated its effectiveness in significantly reducing CO2 emissions, especially in Liquified Biogas (LBG) applications. Stenqvist also underscores the potential of HPDI as a pathway for hydrogen adoption.
Under the terms of the agreement, Westport will contribute specific HPDI assets and opportunities, including relevant fixed assets, intellectual property, and business operations, to the joint venture. The Volvo Group will acquire a 45% stake in the joint venture for approximately US$28 million, payable upon closure, with the potential for an additional US$45 million based on the joint venture's performance, as previously announced.
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