Geely and Renault Group have signed a binding 50/50 joint venture agreement to launch a new powertrain technology company that aims to become a global leader in developing, manufacturing, and supplying new hybrid powertrains and efficient ICE powertrains.
The new company will encompass 17 engine plants and five R&D centers across three continents. Through it, both OEMs will look to achieve an annual production capacity of up to five million internal combustion, hybrid and plug-in hybrid engines and transmissions per year – supplying a full range of powertrains to multiple brands worldwide. The transaction is expected to be completed in the second half of 2023 and remains subject to conventional closing conditions, particularly around the prior approval of the relevant antitrust and foreign direct investment authorities.
Aramco, who signed the letter of intent with Renault and Geely in March 2023, is evaluating a strategic investment in the new powertrain technology company. Its investment would support the joint venture’s growth and contribute to its key R&D initiatives – including those in synthetic fuels solutions and next-gen hydrogen technologies. Renault Group and Geely will lead the joint venture, with equal board members to direct, formulate and execute its strategies. 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.
At launch, the new company is expected to supply multiple industrial customers including Renault Group, Geely Auto, Volvo Cars, Proton, Nissan, Mitsubishi Motors Company, and PUNCH Torino. In the future, it will look to offer end-to-end solutions in powertrain technologies to third-party car brands, eventually welcoming new partners to further strengthen the value chain.