VANCOUVER, BC – Westport Innovations Inc. (TSX:WPT), a global leader in alternative fuel, low-emissions transportation technologies, announced today that it has reached a joint venture agreement with Weichai Power Co.,Ltd (HK:2338), China’s largest heavy duty engine manufacturer, and Hong Kong Peterson (CNG) Equipment Limited. The new entity, Weichai Westport Inc. (WWI), will research, develop, design, manufacture, market, distribute and sell advanced, alternative fuel engines (and relevant parts and kits) for use in automobiles, heavy duty trucks, power generation and shipping applications.
“We are working with the largest heavy duty engine manufacturer in China where over 450,000 Heavy Duty trucks are introduced onto Chinese highways every year,” said David Demers, CEO at Westport Innovations. “Our High Pressure Direct Injection (HPDI) LNG fuel system technology provides a clean, low-emission solution to address a burgeoning market opportunity and the pressing need in China and Asia to reduce high emissions in major cities. With over 11% of the global heavy duty engine market share, Weichai is not only a strong partner for the Chinese market, but a greater partner in global expansion of low-emission, alternative fuel engines.”
The rapid growth in China for energy, especially in the transport sector, is creating a strong demand for newer, cleaner fuels in China such as natural gas. China has a growing reserve of natural gas and is in various stages of reviewing and approving a number of new LNG import terminals to be constructed along its eastern shore. Transitioning natural gas from power generation to transportation frees up increasingly expensive oil based fuels for other applications and provides an economic advantage to the vehicle owner where natural gas is less expensive than diesel on a per unit of energy basis. According to The National Clean Vehicle Productivity Promotion in China, there are over 185,000 Natural Gas Vehicles(NGV) in China and the fueling infrastructure required to fuel these vehicles is growing quickly.
Adding to the scope of the joint venture, WWI will provide ancillary services including inventory, warehousing, training, applications engineering, sales promotion, technology consulting, instalment, maintenance and after sale service.
“As a leader in one of the world’s largest heavy duty truck markets, this partnership will help us expand into one of the fastest growing market segments with innovative, clean technology,” said Mr. Tan Xuguang, Chairman and CEO of Weichai Power. “Our proven ability to develop, manufacture and sell heavy duty engines combined with Westport’s ‘state of the art’ combustion technology will help launching a clean, low-emission heavy duty LNG fueled engine in China in the shortest possible time.”
Under the terms of the 30-year joint venture agreement, Westport’s initial investment is expected to be approximately US$4.5 million (30 million RMB) equaling a 35 per cent share. Weichai Power and Hong Kong Peterson will hold 40 per cent and 25 per cent shares respectively. Westport Innovations and Weichai Power will appoint two members each to the board of directors and Hong Kong Peterson will appoint one. The Chairman of the board will rotate between Weichai Power and Westport after each three-year term, with Weichai power appointing the first board chair.
Westport, a division of Westport Fuel Systems Inc., engineers the world’s most advanced natural gas engines and vehicles. We work with original equipment manufacturers worldwide from design through to production, creating products to meet the growing demand for vehicle technology that will reduce both emissions and fuel costs. To learn more about our business, visit www.westport.com, subscribe to our RSS feed, or follow us on Twitter @WestportDotCom.
Weichai is the biggest powertrain manufacturer and owns the most integrated heavy-duty vehicle value chain in China, including the manufacturing of the engine, gearbox, axle, vehicle and other vehicle related parts. Weichai has over 1,000 models of advanced diesel engine products, which are widely used on heavy-duty trucks, large buses, construction machinery, marine vessels and power generation. Weichai reports a 36% share of Chinese heavy-duty vehicle market and more than 80% share of the over 5-ton construction machinery market. Weichai is one of the top engine suppliers in the world with annual sales of 300,000 engines. In particular, the WD series and WP Landking series of heavy-duty, high-speed engines developed and manufactured by Weichai are appreciated by consumers due to their high performance, reliability and economic benefits. Weichai Power is a public company listed on the Hongkong Stock Exchange and Shenzhen Stock Exchange in China. Weichai has more than 2,000 authorized maintenance centers among China, which supplies convenient and quick service for customers. Additional information can be found at www.weichai.com.
This document contains forward-looking statements, including statements regarding the demand for our products, the future success of our business and technology strategies, investment, cash and capital requirements, intentions of partners and potential customers, the performance and competitiveness of our products and expansion of product coverage, future market opportunities, speed of adoption of natural gas for transportation, growth in demand as a result of new emission standards and terms of future agreements. These statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties and are based on 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 and assumptions include risks and assumptions related to our revenue growth, operating results, industry and products, the general economy, conditions of and access to the capital and debt markets, governmental policies and regulation, technology innovations, fluctuations in foreign exchange rates, global government stimulus packages, the acceptance of natural gas vehicles in fleet markets, the relaxation or waiver of fuel emission standards, the inability of fleets to access capital or government funding to purchase natural gas vehicles, the sufficiency of bio methane for use in our vehicles, the development of competing technologies 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 the forward looking statements except as required by National Instrument 51-102.
Westport Fuel Systems Inc. reported financial results for the second quarter ended June 30, 2020 and provided an update on operations.
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