Volvo Group has launched a previously announced joint venture with Westport Fuel Systems Inc. to accelerate the commercialization of renewable-fueled internal combustion engine (ICE) technology for long-haul and off-road applications.
The venture will focus on providing “affordable solutions in hard to abate sectors like heavy-duty transport and off-road applications" by using Westport's high pressure direct injection (HPDI) fuel system. According to Westport, HPDI technology replaces greenhouse gas-emitting fuels, like diesel, with carbon-neutral or zero-carbon fuels like biogas or hydrogen. That approach enables users to continue using the internal combustion engine without compromising torque, power, or efficiency, while achieving near-zero greenhouse gas emissions, the company says.
The new effort comes as regulations are primed to take effect in California and other regions requiring the use of battery electric vehicles only, and discontinuing the sale of new ICE-powered vehicles. At the same time, the Biden Administration is providing billions of dollars in funding to jump-start efforts to seed a robust green hydrogen market and assist in the pursuit of zero-emissions operations. However, that federal effort is focused on supporting hydrogen fuel cells—which create electricity—as opposed to hydrogen combustion engines.
But Volvo and Westport say their approach is the best way to decarbonize transportation in certain sectors. “As we embark on our joint venture together, we are confident that, we can bring sustainable solutions forward, using the internal combustion engine, running on renewable fuels now and hydrogen in the future," Lars Stenqvist, chief technology officer of Volvo Group, said in a release. "We, at Volvo, are committed to driving the transition to decarbonize transportation and this new HPDI joint venture enables us to accelerate the adoption of combustion engines powered by hydrogen and renewable fuels for long-haul and off-road applications in partnership with Westport."
The new joint venture will operate as an independent entity with Westport contributing HPDI-related fixed assets, intellectual property, and business. Volvo Group has acquired a 45% interest in the joint venture for approximately $28 million, plus up to an additional $45 million as an earn-out depending on the subsequent performance of the joint venture.
Headquartered in Vancouver, Canada, the joint venture will be led, on an interim basis, by Westport CEO Dan Sceli, in addition to Scott Baker who will take on the role of vice president, product development and technology officer, and Anders Johansson, who will be vice president and commercial officer.
