Westport Fuel Systems Inc. (NASDAQ:WPRT) Q3 2023 Earnings Call Transcript

Chris Dendrinos: Great. Yes. Thank you for all that color. I guess my – as my follow-up and sticking with the HPDI here, you mentioned volumes with Volvo were maybe picking up some. I know previously, there were some dynamics around the changeover to a new model with the Volvo Truck, and that was kind of weighing on things maybe a little bit near-term. Can you maybe just provide a bit more color on sort of what the messaging from Volvo has been as of late and sort of expectations going forward, if there’s been any kind of changes in the past couple of months? Thanks.

Bill Larkin: I can – look, I think Volvo’ committed to HPDI. They’re very excited about HPDI. In fact, there was a podcast one of their technical leaders did. And again, they mentioned HPDI in their technical podcasts and were really excited and believe in the HPDI technology. So, one of the biggest takeaways is just having that vote of confidence in our technology and the right solution for decarbonizing in the [indiscernible] industry. So we – as we mentioned, as we get kind of the switchover, we did expect a lower decline in our unit volumes in the second quarter. We started seeing the ramp-up in the third quarter, still kind of a partial quarter of the summer shutdown. And so we expect that to continue to increase in the fourth quarter even with probably the slower holidays, slower sales during the last couple of weeks for the year. We’re – I think are really excited and motivated to continue to increase and drive demand for this product.

Chris Dendrinos: Okay. Great. Thank you very much.

Operator: Thank you. Our next question comes from Colin Rusch from Oppenheimer. Please go ahead. Your line is open.

Colin Rusch: Thanks so much, guys. Can you give us an update on where things are with Weichai and the HPDI deliveries that you’ve had in Q3 for a little while and how the Volvo relationship may change dynamics with those guys?

Bill Larkin: First, I’ll tackle the second one. I don’t – the dynamics is incurred, I don’t think it’s going to change. That activity won’t go into the GDP. That will be part of the GDP. So the overall relationship won’t change. Regarding Weichai, they continue to move forward with their development activities around integrating HPDI on certain engine platforms as well as certain CAFE applications. As of right now, we continue to support these initiatives. And we’re, of course, providing pricing information. But as right now, I don’t have – we don’t have anything else to add other than where we continue to support their initiatives and where the support we trying supply the HPDI systems and components when they’re ready to launch.

Colin Rusch: Super helpful. Thanks. And the Renault application is a nice win. And I’m just curious about the maturity of any other customer conversations around stationary or marine applications. Obviously, there’s going to be a role for hydrogen in a variety of areas of the economy. I just want to get a sense of how robust the various applications can be for the technology.

Bill Larkin: I know there is – for the larger applications, the HPDI is ideal for those larger applications. We have had some conversations but nothing substantive that leads to some sort of proof-of-concept type work. Typically, just even get to the start line, they are very long years, conversations with the engine manufacturers, the end users, there’s a lot of education that goes into it in terms of the overall system architecture technology and also benefit. Regulation also helps as well, kind of drive interest for – in HPDI technology as these larger engine applications displacements, there’s a huge push decarbonized, especially in the marine. There’s been a big push, especially in the ports and minimize or essentially eliminate the use of bunker fuel just because of how the pollution related to that. So there’s always conversations going on. There’s a lot of interest, but these are very, very long conversations.