Volvo, Westport enter joint venture

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Wesport Hpdi System + FuelsVolvo Group and Westport announced Wednesday the signing of a non-binding letter of intent to establish a joint venture to accelerate the commercialization of Westport’s High Pressure Direct Injection (HPDI) fuel system technology for long-haul and off-road applications.

Powered by carbon-neutral fuels like biogas, zero-carbon fuels like green hydrogen and other renewable fuels, Westport’s HPDI fuel system is a high-performance solution supporting significant carbon reductions in tricky sectors like heavy-duty and off-road mobility. The HPDI fuel system consists of a fully integrated “tank to tip” solution, based on diesel technology. 

“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."

At the heart of the engine is a 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.

Volvo and Westport have collaborated for 15 years, and while Volvo will be a key customer of this joint venture, its 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 $28 million, plus up to an additional $45 million depending on the performance of the joint venture. 

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Volvo seeks to reach net-zero greenhouse gas emission-enabled products, solutions and services by 2040 through a mixture of battery- electric, fuel-cell electric and internal combustion engines.

Westport CEO David Johnson said the joint venture with Volvo is a natural extension of both companies’ commitment to accelerating global carbon reduction, and "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.