Geely and Renault Group have officially formed a new company to develop hybrid and ICE powertrains. The news of the collaboration was initially announced in November 2022 and the two have now signed a contract.
Petroleum and natural gas company Aramco is evaluating an investment in the new powertrain business, after signing a letter of intent with Renault and Geely in March this year. This would support the growth of the company and contribute to key research and development in synthetic fuels and next-gen hydrogen technologies.
Other supply chain partners are encouraged to get involved.
With an equal share in the new entity, a team from each of the OEMs will work together to lead operations: one in Madrid, Spain for Renault Group and one in Hangzhou Bay, China for Geely. There are plans to establish a new headquarters in the UK, which will be home to an executive team.
Renault Group and Geely will transfer intellectual property to the operational centers enabling them to be fully autonomous. The new joint venture’s complementary product portfolio and regional footprint could offer solutions for 80% of the global ICE and hybrid market, according to the companies.
Geely Auto and Renault plan to secure a long-term procurement agreement from the joint venture for ICE, hybrid and plug-in hybrid powertrains (engine and transmissions) for passenger vehicles. Renault will also procure powertrains for its light commercial vehicles and hybrid batteries. The new entity will supply several brands under the Renault/Geely umbrella: Renault Group, Geely Auto, Volvo Cars, Proton, Nissan, Mitsubishi Motors and Punch Torino. In the future, the aim is to provide complete powertrains for third-party customers as well.
Luca de Meo, CEO of the Renault Group, said, “Facing today’s automotive challenges, no one can claim to have all the solutions, alone. Coming up with breakthrough innovations requires combining expertise and assets. When it comes to the global race for decarbonizing road transportation, 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, commented, “We are pleased to be embarking on this journey to become a global leader in hybrid technologies, providing low-emission solutions for auto makers around the world. We are looking forward to working with Luca de Meo and his 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.”