Westport and Isuzu Sign New Development Agreement; Commit to 25 Percent Fuel Economy Improvement

VANCOUVER, British Columbia--Dec. 23 2005--Westport Innovations Inc. (TSX:WPT) has signed a new joint partnership and funding agreement with Isuzu Motors Limited of Japan for the application of Westport's Compressed Natural Gas Direct Injection (CNG-DI) technologies on Isuzu engines and commercial vehicles.

Isuzu will provide Westport with CDN$1.5 million of new funding through the calendar year 2006 to demonstrate up to 25 percent improved fuel economy over current spark-ignited CNG engines. Westport's CNG-DI system on a 5-liter 4-cylinder Isuzu diesel engine will meet Japan's Post New Long Term Exhaust Emissions standard for 2009. Work will be performed in Isuzu and Westport engine laboratories in Japan and Canada.

Today's current production Isuzu truck, the ELF CNG-MPI, already achieves extremely low exhaust emissions but with less efficient spark-ignited technology. Masaru Odajima, Executive, Powertrain Engineering at Isuzu in Tokyo, said Westport technology offers ultra low exhaust emissions coupled with improved fuel economy by as much as 25 percent over spark-ignited engines.

"Our customers will see the benefits of lower fuel costs and ultra-low exhaust emissions from these new CNG-DI technologies we are advancing with Westport. Westport's high-pressure direct injection of natural gas represents the future of NGVs," said Odajima.

Michael Gallagher, Westport's President and Chief Operating Officer, said that achieving fuel efficiency and emissions targets can create very large commercial opportunities for both Westport and Isuzu.

"We are pleased to continue on our path to commercialization with this renewed commitment from Isuzu," said Gallagher. "We look forward to working with Isuzu to create next-generation vehicles with the goal of exceeding customers performance expectations around the world with Westport's CNG-DI technologies."

Isuzu and Westport have agreed to work towards completing an Intellectual Property Rights agreement (IPR) during the first quarter of 2006. Upon completion of the IPR, Westport and Isuzu engineering teams will work on design for manufacturing and cost optimization.

The Japanese Ministry of Land, Infrastructure and Transport (MLIT) announced its full-scale support for the move towards CNG use in vehicles, away from diesel vehicles, as they emit fewer harmful emissions, according to Kyodo News. Beginning in early 2005, the MLIT promoted CNG vehicles in the cities of Tokyo, Nagoya, and Osaka, set up public and private initiatives to establish more CNG fuelling stations, and expanded subsidies for CNG vehicles and lower CNG prices. Japan currently has more than 24,000 natural gas vehicles and almost 300 refuelling stations. CNG in Japan currently retails at 63 to 76 yen per cubic meter; compared to gasoline at 124 yen per liter and diesel at 100 yen per liter. At these fuel prices, CNG is up to 54% less than gasoline and up to 38% less than diesel on an energy-equivalent basis.

Isuzu is celebrating its most successful year ever for commercial CNG vehicles (CNGVs) in 2005 in Japan and plans to introduce CNGVs in China and several Southeast Asian countries. Isuzu Motors Limited is one of the world's leading manufacturers of commercial vehicles and diesel engines. Isuzu ranks number one globally in light-duty and medium-duty truck production with the Isuzu ELF as Japan's best-selling light-duty truck. Isuzu promotes conservation of the global environment and is committed to the development and dissemination of clean diesel and low pollution, environmentally positive vehicles that run on alternative fuel.

Westport's five-year relationship with Isuzu began in December 2000, when Westport and Isuzu entered into a cooperative technology development agreement to develop a high-efficiency, low-emissions direct-injection natural gas fuel system for Isuzu engines.

About Westport Innovations Inc.

Westport Innovations Inc. is the leading developer of environmental technologies that allow engines to operate on clean-burning fuels such as natural gas, hydrogen, and hydrogen-enriched natural gas (HCNG). Westport has technology development alliances in place with Cummins, Ford, MAN, BMW, and Isuzu, as well as an ownership interest in Clean Energy, the largest provider of natural gas for vehicles in North America. Cummins Westport Inc., Westport's joint venture with Cummins Inc., manufactures and sells the world's widest range of low-emissions alternative fuel engines for commercial transportation applications such as trucks and buses.

Westport Innovations Inc. (TSX:WPT)