Marking a groundbreaking shift poised to revolutionize the auto industry, Renault Group and Geely have consummated a 50/50 joint venture (JV) agreement to launch an industry-leading powertrain technology company. This news comes following a framework agreement first announced in November 2022, and aims to position the new JV as a global trailblazer in developing, manufacturing, and supplying top-tier hybrid and highly efficient Internal Combustion Engine (ICE) powertrains.
Aramco, the world’s largest oil company, is mulling a strategic investment in this new venture, after signing a letter of intent with Renault and Geely in March 2023. Such an investment would accelerate the company’s growth, further boosting its research and development capacities, particularly in synthetic fuels solutions and advanced hydrogen technologies. Synthetic fuels, including e-fuels and hydrogen, are part of the broad solution for decarbonization in the automotive industry.
The joint venture will see equal leadership from both Renault Group and Geely, maintaining a balance of board members to steer strategies and the direction for the JV. The new company is expected to establish its headquarters in the UK, consolidating operations, harnessing synergies, and delineating future plans. Operational centers will be located in Madrid and Hangzhou Bay, representing Renault Group and Geely, respectively.
Both Renault Group and Geely will confer Intellectual Property to the operational centers, thereby enabling them to be entirely self-sufficient in developing future powertrain technologies that meet market expectations. The new JV is projected to provide solutions for a staggering 80% of the global ICE and hybrid market. Upon launch, the JV will supply a multitude of industrial customers, including Renault Group, Geely Auto, Volvo Cars, Proton, Nissan, Mitsubishi Motors Company, and PUNCH Torino.
Subject to existing laws and regulations, Geely Auto and Renault will initiate a long-term procurement agreement with the joint venture for ICE, hybrid, and plug-in hybrids powertrains. Renault also plans to procure powertrains for light commercial vehicles, in addition to developing hybrid batteries.
In the words of Luca de Meo, CEO Renault Group, “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!”
Geely Holding Group Chairman, Eric Li, echoed these sentiments, stating, “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.”
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