Westport, Volvo form JV to advance HPDI fuel systems (NASDAQ:WPRT) - Seeking Alpha

Westport, Volvo form JV to advance HPDI fuel systems (NASDAQ:WPRT) | Seeking Alpha

Westport, Volvo form JV to advance HPDI fuel systems

Westport Fuel Systems Inc. (WPRT),

WPRT:CA By:

Carl Surran, SA News Editor
28 Comments audioundwerbung/iStock via Getty Images

Westport Fuel Systems (NASDAQ: WPRT) +4% pre-market Wednesday after saying it signed a letter of intent to form a joint venture with automaker Volvo that will help globalize and commercialize Westport's HPDI fuel system technology for long-haul and off-road trucking transportation.

Volvo will acquire a 45% stake in the JV for ~$28M, plus up to an additional $45M depending on the performance of the venture, while Westport ( WPRT) contributes its HPDI assets and activities to the JV.

Westport's ( WPRT) High Pressure Direct Injection system is touted as a cost-effective way to cut carbon emissions in trucking applications, helping trucking and off-road equipment manufacturers address the challenges of meeting regulatory requirements of Euro 7 and the U.S. Environmental Protection Agency.

Westport's ( WPRT) HPDI has been on the road in Volvo trucks for more than five years, and has been shown to reduce carbon dioxide emissions in liquefied biogas applications and is a potential avenue for hydrogen use, Volvo CTO Lars Stenqvist said.

While Volvo will be a key customer of the joint venture, the JV's mandate will be to enhance commercialization of HPDI through the addition of new trucking and equipment manufacturers as customer, the companies said.

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