Westport Innovations Inc. will serve as a Tier 1 Development Supplier for Volvo's heavy-duty natural gas engines and associated supply chain. Westport will supply its Westport HD technology and work together with the engine manufacturer to qualify appropriate suppliers consistent with Volvo volume and quality expectations. The new natural gas engines are expected to meet future European emission requirements.
"High energy efficiency and low emissions of greenhouse gases are a key focus for our strategic development efforts as natural gas and its renewable fuels counterpart, biogas, quickly become the mainstream alternative fuel choice for heavy-duty engines. We are excited to be working together with a global leader who recognizes the importance of both performance and environmental stewardship," stated David Demers, CEO of Westport Innovations Inc.
In July 2008, Westport announced an agreement with Volvo to integrate and test Westport's HD system on Volvo engines. Under the new agreements, Westport and Volvo will share program development expenses.
The agreement requires Westport and Volvo to work to negotiate further agreements regarding certain elements of the development program. It also requires Westport and Volvo to satisfy certain milestones in order for the development program to continue, including the completion of the relevant technological, engineering and cost requirements.