Volvo Group and Westport Sign Letter of Intent to Establish JointVenture to Reduce CO2 Emissions from Long-Haul Transport

Utilizing HPDI™ Technology to Accelerate the Decarbonization Efforts of Global OEM Customers

Volvo Group and Westport supplier of advanced alternative fuel delivery systems and components for the global transportation industry, have signed a nonbinding 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 offroad applications. Volvo and Westport share the vision of creating sustainable transport
solutions to accelerate the decarbonization efforts of global trucking, engine, and
equipment manufacturers for their customers and society.

Westport’s HPDI fuel system is a high-performance solution supporting significant
carbon reductions in hard-to-abate sectors like 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 like
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: batteryelectric, 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,” says Lars Stenqvist, chief
technology officer of Volvo.

“Westport is advancing fuel system solutions to help our customers affordably address
the most pressing challenge of carbon reduction, while continuing to utilize existing
manufacturing infrastructure,” said David Johnson, chief executive officer,
Westport. “The joint venture with Volvo is a natural extension of both companies’
commitment to accelerating global carbon reduction and we are proud to partner with
such a bold supporter of the future of the internal combustion engine. Combining our
expertise strengthens HPDI’s position in the market and underscores Westport’s
commitment to developing affordable fuel system technology that supports significant
CO2 reductions in hard-to-abate sectors like heavy-duty transport and off-road
applications, including a pathway to power equipment with zero carbon fuels like
hydrogen.”
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.

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