Volvo Group and Westport, a supplier of alternative fuel delivery systems and components, 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.
Westport’s HPDI fuel system is a solution supporting significant carbon reductions in sectors like heavy-duty and off-road mobility, according to the company. While Volvo will be a key customer of the joint venture, the companies note that 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, the companies note. According to the recent press release, 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.
Volvo aims to reach net-zero greenhouse gas emission-enabled products, solutions, and services by 2040. Volvo advocates for a three-pronged approach to fuel in the future: battery electric, fuel-cell electric and internal combustion engines.
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, according to the companies’ press release, is expected to launch in the first half of 2024.
