9:20 am, July 11, 2023
Renault Group and Geely have signed a joint venture agreement to form a new powertrain technology company, it was announced today.
Both will have a 50 per cent stake in the company, and say its aim is to become the world leader in developing, manufacturing and supplying best-in-class hybrid powertrains and highly efficient ICE powertrains.
It follows the announcement in March of a letter of intent signed by Aramco, Geely and Renault, with Aramco said to be weighing up a strategic investment in the unnamed firm.
Aramco’s investment would go towards key research and development across synthetic fuels and next-gen hydrogen tech.
The new company will boast 19,000 employees at 17 engine plants and five research & design centres across three continents, providing powertrains for multiple brands.
There will also be two operational centres – one in Madrid for Renault Group and the other in Hangzhou Bay for Geely – in charge of the respective operations.
An executive team will be based in the new company’s HQ, which is intended to be established in the UK, to consolidate operations and define future plans.
Renault Group and Geely will transfer intellectual property to the operational centres, giving them full autonomy in developing the powertrain tech.
It’s estimated that the joint venture’s complementary product portfolio and regional footprint could provide for 80 per cent of the global ICE and hybrid market.
At launch, the new company is expected to supply multiple customers including Renault Group, Geely Auto, Volvo Cars, Proton, Nissan, Mitsubishi Motors Company and Punch Torino.
Completion of the transaction is expected to take place in the second half of this year and is subject to the conditions that usually apply, particularly approval by anti-trust and foreign direct investment authorities.
Renault Group CEO Luca de Meo said: ‘Facing today’s automotive challenges, no one can claim to have all the solutions alone.
‘Coming up with breakthrough innovations requires [us] to combine expertise and assets.
‘When it comes [to] the global race for decarbonising 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 [that’s] up to the challenge, able to disrupt the game and open the way for ultra-low emissions ICE technologies.
‘I want to thank [Geely Holding Group chairman] Li Shufu for his trust. We are now ready to move forward!’
Li said: ‘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.’
