By Westport Fuel Systems’ shares experienced a significant boost as the Canadian company announced its plans to collaborate with Volvo on a joint venture. The aim of the partnership is to expedite the commercialization of Westport’s fuel-system technology, particularly for long-haul and off-road use.
As of morning trading, the shares had surged by 15% to reach C$14.64 on the Toronto Stock Exchange. This increase also led to a year-to-date gain of 41%. On Nasdaq, the stock saw a 14% rise, reaching $11.01.
Having signed a letter of intent, Westport will contribute its current HPDI fuel system assets and activities to the joint venture. In turn, Volvo will acquire a 45% interest in the venture, investing approximately $28 million initially, with a potential additional investment of up to $45 million, contingent upon the performance of the joint venture.
Subject to successful negotiations, the joint venture is projected to launch in the first half of next year. The companies anticipate finalizing a comprehensive investment agreement, joint venture agreement, supply agreement, and development agreement.
Westport’s HPDI fuel system has already been implemented in Volvo trucks for over five years. This technology has proven effective in reducing carbon dioxide emissions in liquefied biogas applications and showcases potential for hydrogen use, according to Volvo’s Chief Technology Officer, Lars Stenqvist.
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