Volvo Group and Westport Fuel Systems signed a non-binding letter of intent (LOI) to establish a joint venture to accelerate the commercialization and global adoption of Westport’s HPDI (High Pressure Direct Injection) fuel system technology for long-haul and off-road applications.

Westport’s HPDI fuel system is a high-performance solution supporting significant carbon reductions in hard-to-abate sectors such as heavy-duty and off-road mobility. HPDI enables the world’s trucking and off-road equipment manufacturers to address the challenges of meeting the regulatory requirements of Euro 7 and the US EPA while offering end users affordable options that are powered by carbon-neutral fuels such as biogas, zero carbon fuels like green hydrogen and other renewable fuels.

While Volvo will be a key customer of the joint venture, 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. Volvo will acquire a 45% interest in the joint venture for the sum of approximately US$28 million (approximately SEK 300 million) plus up to an additional US$45 million (approximately SEK 500 million) depending on the performance of the joint venture.

Volvo’s ambition is to reach net-zero greenhouse gas emission-enabled products, solutions, and services by 2040. Volvo believes that the future will demand diverse propulsion solutions for diverse applications to meet customers’ needs and environmental demands. Volvo advocates for a three-pronged approach: battery-electric, fuel-cell electric and internal combustion engines.

Decarbonization with internal combustion engines running on renewable fuels, especially with HPDI, plays an important part in sustainable solutions. 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.

—Lars Stenqvist, Chief Technology Officer of Volvo

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.

HPDI. Westport’s HPDI fuel system is a complete system offering OEMs the flexibility to differentiate their biogas, natural gas, hydrogen, and other fuel product lines easily while also maintaining maximum commonality with their conventional diesel fueled products. Greenhouse gas emitting fuels such as diesel can be replaced with carbon-neutral or zero-carbon fuels such as biogas or hydrogen while maintaining the durability, affordability, efficiency, and performance characteristics that have come to be associated with the diesel engine.

The HPDI fuel system consists of a fully integrated “tank to tip” solution, based on diesel technology. 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. Designed for heavy long-haul and distribution operations as well as off-road applications such as mining, rail and marine, HPDI fuel systems offers an alternative with low climate impact while meeting the highest industry standards for performance, fuel efficiency and operating range required for heavy-duty transport.