Westport Awarded Development Contract with a Global Heavy Truck Manufacturer to Adapt and Commercialize Next Gen LNG HPDI™ Fuel System for the Euro 7 Vehicle Platform

Rhea-AI Summary

Westport Fuel Systems Inc. (WPRT) Awarded $33M Development Program for Next Generation LNG HPDI™ Fuel System to Meet Euro 7 Emissions Standards

Positive

• Westport Fuel Systems Inc. has been awarded a development program by a global heavy truck manufacturer, indicating a strong partnership and recognition of the company's expertise in sustainable transport solutions.
• The value of the development program is estimated to be USD$33 million, signifying a significant financial opportunity for the company.
• The program aims to adapt Westport's Next Generation LNG HPDI™ fuel system to meet the Euro 7 emissions requirements for heavy-duty vehicle applications, indicating the company's commitment to environmental sustainability and compliance with regulatory standards.
• The new LNG and liquified biomethane fueled product, targeted for launch within a few years, demonstrates the company's focus on innovation and development of advanced alternative fuel systems for the global transportation industry.

Negative

• None.

Insights

Automotive Industry Analyst

Westport Fuel Systems Inc.'s recent announcement of securing a development program with a global heavy truck manufacturer represents a strategic advancement in the company's product offerings. The focus on adapting the Next Generation LNG HPDI fuel system to meet Euro 7 emissions standards is a significant step towards sustainability in the heavy-duty vehicle sector.

The estimated value of USD$33 million for this program, funded by the OEM, indicates a substantial investment in cleaner technology and reflects a growing trend in the automotive industry towards reducing carbon emissions. The program's goal to produce a new LNG and liquified biomethane fueled product within a few years is ambitious, but aligns with global decarbonization efforts and regulatory pressure.

The development of this technology has the potential to enhance Westport's competitive edge by offering a solution that not only meets stringent emission regulations but also improves fuel efficiency and engine performance. This could lead to increased demand for Westport's products among OEMs looking to comply with future regulations and appeal to environmentally conscious consumers.

However, the success of this initiative will depend on various factors, including the finalization of Euro 7 standards, technological challenges and market acceptance of the new fuel system. As the program progresses, investors should monitor Westport's ability to deliver on its promises and the impact of these developments on its financial performance.

Environmental Policy Expert

The Euro 7 standards represent the latest effort by the European Union to curb air pollution from road transport. Westport Fuel Systems' initiative to develop a fuel system that complies with these standards is a proactive response to regulatory changes that will likely become mandatory for vehicle manufacturers in the EU from mid-2027.

By improving fuel pressure control and supporting higher pressure fuel supply systems, Westport is not only addressing environmental concerns but also enhancing engine performance and Brake Thermal Efficiency (BTE). The inclusion of On Board Fuel Consumption Monitoring (OBFCM) further underscores the company's commitment to transparency in fuel efficiency and emissions.

While this development program could position Westport as a leader in sustainable transport solutions, the long-term impact on the company will depend on the speed of regulatory approval, the adoption rate of the new standards by the industry and the scalability of Westport's technology across different OEMs and markets.

Financial Analyst

The announcement by Westport Fuel Systems Inc. regarding the development program for its Next Generation LNG HPDI fuel system is a significant financial event for the company. The USD$33 million contract represents a notable revenue opportunity and signals confidence from the OEM in Westport's technology.

Investors should consider the potential increase in Westport's market share and the strengthening of its business relationships with OEMs as positive indicators for future growth. The focus on LNG and liquified biomethane fuels also taps into the growing alternative fuels market, which could lead to diversification of revenue streams.

However, the actual financial impact will depend on the timely and successful development of the product, as well as the market's readiness to adopt such technologies. The investment in R&D and potential challenges in the development process should be weighed against the expected returns from this agreement.

VANCOUVER, BC, Dec. 19, 2023 /PRNewswire/ - Westport Fuel Systems Inc. ("Westport" or the "Company") (TSX: WPRT) (NASDAQ: WPRT), a leading supplier of advanced alternative fuel systems and components for the global transportation industry, today announced that it has been awarded a development program by a global heavy truck manufacturer to adapt its Next Generation LNG HPDI™ fuel system to meet the Euro 7 emissions requirements for heavy-duty vehicle applications. The value of the development program is estimated to be USD$33 million and will be funded by the original equipment manufacturer (OEM). Work on the program is already underway with a targeted launch of the new LNG and liquified biomethane fueled product within a few years.

Westport's Next Generation HPDI fuel system has been developed to meet the Euro 7 standards and will introduce the following new features:

• Improved fuel pressure control, thereby improving fuel efficiency
• Supporting higher pressure fuel supply systems to maximize engine performance and Brake Thermal Efficiency (BTE)
• Improved reliability and durability
• On Board Fuel Consumption Monitoring (OBFCM)

"This new program exemplifies our longstanding relationship with the OEM, emphasizing our shared vision of creating sustainable transport solutions around the world. Our LNG HPDI fuel system enables long-haul trucks to significantly reduce CO₂ emissions now while fully meeting a fleet's performance demands for payload, performance, and durability, as well as stringent Euro 7 emission regulations," said Anders Johansson, vice president of Heavy-Duty OEM for Westport Fuel Systems. "Our collaboration advances our realistic, affordable and immediately available solution for fleets to achieve their decarbonization goals as well as driving the acceleration and scaling of development for global market adoption for a variety of OEMs," he added.

The program marks Westport's next major engagement with the OEM to develop low carbon solutions for heavy-duty trucking with the development of Westport's Next Generation LNG HPDI fuel system encompassing on and off engine components. This new fuel system is an evolution of the existing HPDI LNG truck application from the OEM that is commercially available today and has been on the road for several years.

The Euro 7 standards are aimed at reducing air pollution from road transport, addressing pollutants such as nitrogen oxides (NOx) and particulate matter, by lowering emissions limits from new motor vehicles sold in the European Union, versus the standards currently set out in Euro VI. Final agreement on the new regulation remains outstanding, but for heavy-duty vehicles the European Commission's proposal is to implement the new standards from mid-2027.

About Westport Fuel Systems

At Westport, we are driving innovation to power a cleaner tomorrow. We are a leading supplier of advanced fuel delivery components and systems for clean, low-carbon fuels such as natural gas, renewable natural gas, propane, and hydrogen to the global transportation industry. Our technology delivers the performance and fuel efficiency required by transportation applications and the environmental benefits that address climate change and urban air quality challenges. Headquartered in Vancouver, Canada, with operations in Europe, Asia, North America, and South America, we serve our customers in more than 70 countries with leading global transportation brands. At Westport, we think ahead. For more information, visit www.wfsinc.com.

Forward-Looking Statements

This press release contains forward-looking statements, including statements regarding the growth of the global market for alternative fuel systems, the factors responsible for such growth, the expected revenue, timing of revenue, timing of government regulations and expected date for commencement of production of the referenced LNG fuel system and components. These statements are neither promises nor guarantees but involve known and unknown risks and uncertainties and are based on both the views of management and assumptions that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activities, performance, or achievements expressed in or implied by these forward-looking statements. These risks, uncertainties, and assumptions include those related to the general economy, governmental policies and regulation, the demand for LNG fuel system and components, supply chain disruptions, as well as other risk factors and assumptions that may affect our actual results, performance, or achievements, or financial position discussed in our most recent Annual Information Form and other filings with securities regulators. Readers should not place undue reliance on any such forward-looking statements, which speak only as of the date they were made. We disclaim any obligation to publicly update or revise such statements to reflect any change in our expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in these forward-looking statements except as required by National Instrument 51-102. The contents of any website referenced in this press release are not incorporated by reference herein.

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SOURCE Westport Fuel Systems Inc.

FAQ

What is the development program awarded to Westport Fuel Systems Inc. (WPRT)?

Westport Fuel Systems Inc. has been awarded a development program by a global heavy truck manufacturer to adapt its Next Generation LNG HPDI™ fuel system to meet the Euro 7 emissions requirements for heavy-duty vehicle applications. The value of the development program is estimated to be USD$33 million and will be funded by the original equipment manufacturer (OEM).

What are the key features of Westport's Next Generation HPDI fuel system?

The Next Generation HPDI fuel system has been developed to meet the Euro 7 standards and introduces improved fuel pressure control, supporting higher pressure fuel supply systems to maximize engine performance and Brake Thermal Efficiency (BTE), improved reliability and durability, and On Board Fuel Consumption Monitoring (OBFCM).

What is the significance of the Euro 7 standards in the development program?

The Euro 7 standards aim to reduce air pollution from road transport by lowering emissions limits from new motor vehicles sold in the European Union, versus the standards currently set out in Euro VI. The program aims to adapt Westport's fuel system to meet these stringent emission regulations, emphasizing the company's commitment to environmental sustainability and compliance with regulatory standards.

What is the targeted launch timeline for the new LNG and liquified biomethane fueled product?

The targeted launch of the new LNG and liquified biomethane fueled product is within a few years, demonstrating the company's focus on innovation and development of advanced alternative fuel systems for the global transportation industry.