Geely and Renault Group have signed a joint venture agreement to launch a new business dedicated to develop and build internal combustion engines (ICE) and hybrid powertrains.

Saudi oil business Aramco is is evaluating a strategic investment in this new powertrain technology company.

The joint venture will be jointly led by Renault Group and Geely, with equal board members to formulate and execute strategies and set the direction for the joint venture. The initial organisation will secure the continuity of the business with two operational centers in charge of the respective operations: Madrid for Renault Group and Hangzhou Bay for Geely. An executive team will be based in the headquarters of the new company, which is intended to be established in the UK, to consolidate operations, build on synergies, and define future plans.

The new company will be a standalone global supplier of powertrains and developing carbon free and low-emission technologies from five global R&D centres. At launch, the new company is expected to supply multiple industrial customers including Renault, Dacia, Geely Auto, Volvo Cars, Lynk & Co, Proton, and also Nissan and Mitsubishi Motors Company. In future, the partnership could also offer powertrain technologies to third-party car brands.

 

The new company is planned to operate 17 powertrain plants in three continents, employing around 19,000 people in total. It will have a combined capacity of over five million internal combustion, hybrid and plug-in hybrid engines and transmissions per year, supplying over 130 countries and regions. The new company's joint product portfolio and regional footprint could offer solutions for 80% of the global ICE market.

Luca de Meo, CEO of Renault Group, said: “Facing today’s automotive challenges, no one can claim to have all the solutions, alone. Coming up with breakthrough innovations requires to combine expertise and assets. When it comes about the global race for decarbonizing road transports, there is no time to lose, and it will not be business as usual.  Today, we are proud to join forces with a great company like Geely to set up a new player, up to the challenge, able to disrupt the game and open the way for ultra-low emissions ICE technologies. I want to thank Eric Li Shufu for his trust: we are now ready to move forward!”

Eric Li, Geely Holding Group chairman, added: “We are pleased to be embarking on this journey to become a global leader in hybrid technologies, providing low-emission solutions for automakers around the world. We are looking forward to working with Luca de Meo and his Renault team. With this agreement, we reiterate our commitment to leveraging our group-wide technological expertise and brand portfolio to pioneer the journey to greater sustainability and value creation which will lead to better consumer experiences.”

ICE & hybrid vehicles will still represent up to 50% of passenger cars sales worldwide even by 2040. As part of its Renaulution plan, Renault Group is ensuring the further development of its core business, with the launch of a totally new range of Renault ICE & Hybrid (passenger cars), Dacia and LCV. Renault Group and Geely will combine their ICE in a 50-50 entity.