Natgas engine developer Westport can grow without incentives: CFO

Wed Oct 3, 2012 1:51pm EDT
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By Bhaswati Mukhopadhyay

(Reuters) - Westport Innovations Inc WPT.TO (WPRT.O: Quote), a Vancouver-based developer of technology that allows truck and bus engines to run on natural gas, doesn't need tax incentives in the United States to build its business, Chief Financial Officer Bill Larkin says.

In fact, he says, the prospect of future tax breaks for vehicle operators to switch to natural gas can be a disincentive to invest.

"We do not need incentives for natural gas technology to drive adoption," Larkin said in an interview on Tuesday.

"It actually hurts the investment in this technology because they (the U.S. government) have been dangling this carrot ... and so investments are delayed," he said.

"It is finally put on the backburner, hopefully permanently," he said, referring to the U.S. Senate's rejection in March of proposed tax incentives for long-haul trucks and commercial vehicles to switch to the cheaper fuel.

Westport, whose top shareholders include Soros Fund Management LLC and Fidelity Management & Research Co, develops technology that makes engines operate on clean-burning fuels such as compressed natural gas (CNG), liquefied natural gas (LNG) and renewable natural gas fuels.

The Canadian company has yet to post a profit since listing on the Nasdaq in 2008, but expects revenue of $400 million to $425 million this year from its contracts with companies such as General Motors Co (GM.N: Quote), Caterpillar Inc (CAT.N: Quote), Cummins Inc (CMI.N: Quote) and Ford Motor (F.N: Quote).

Revenue in 2011 was $265 million, up more than 80 percent.   Continued...