Clean Diesel Technologies Inc (CDTI.O), a maker of emission control systems for vehicles, said it had started production of catalysts for Honda Motor Co's (7267.T) 2015 Acura TLX model, sending its shares up as much as 160 percent in early trading.
Clean Diesel said shipments of the catalysts featuring its mixed-phase technology are expected to begin in the first half of 2014.
"The demand for greater emission reduction continues to grow across all vehicle segments as evidenced by the recent U.S. Environmental Protection Agency's announcement of Tier 3 standards," Clean Diesel's interim Chief Executive Nikhil Mehta said in a statement.
Last week, the agency announced the new fuel and automobile rules to reduce soot, smog and toxic emissions from cars and trucks.
U.S. automakers are already working to nearly double the average fuel economy of new cars and light trucks to 54.5 miles per gallon by 2025, under rules that took effect in 2012.
Clean Diesel's catalysts business, under which it offers devices as well as formulations used in parts such as catalytic converters and exhaust systems, accounted for about 43 percent of its revenue in the nine months ended September 30.
The company, which had a market value of $26.2 million as of Monday's close, already provides catalysts for the North American versions of Honda's four-and six-cylinder Accord, Acura TSX and RLX, and its hybrid and plug-in hybrid models.
Clean Diesel's shares were up 128 percent at $6.44 in noon trading on the Nasdaq.
(Reporting by Rohit T.K. in Bangalore; Editing by Ted Kerr and Kirti Pandey)