Renault, in collaboration with its Chinese partner Geely, has unveiled a long-awaited joint venture focused on the development of combustion and hybrid engines. With the goal of enhancing the competitiveness of their traditional automotive sector, the companies aim to pioneer more fuel-efficient gasoline engines and hybrid technologies. This initiative comes as a strategic response to the industry trend of increased investment in low-emission powertrains, particularly amid a slowdown in electric vehicle sales.
Toyota Motor showcased next-generation engines for hybrids and other lower-emission vehicles. China's BYD also announced new hybrid technology with lower fuel consumption this week. "A combination of various powertrain technologies is necessary to achieve a successful decarbonization in a world where more than half of vehicles produced are expected to still rely on combustion engines by 2040", Renault and Geely said in a joint statement.
The 50-50 joint venture is a core element of Renault's strategy to stay in the race against larger competitors by signing multiple partnerships to reduce costs and access new markets.
By carving out its internal combustion engine business, Renault plans to focus on EVs, part of the French firm's broad restructuring that also involves overhauling its decades-old alliance with Nissan Motor.
Geely continues its strategy of forging international partnerships to extend its presence beyond China. Prior to this, Geely had entered into a hybrid gasoline engine development agreement with Mercedes-Benz and acquired a stake in the renowned German automaker. Named HORSE Powertrain, the joint venture will be based in London and is set to provide engines to both Geely and Renault, as well as other external manufacturers.
The automakers anticipate achieving approximately 15 billion euros ($16.2 billion) in annual revenue, along with the production of roughly five million powertrain units per year. Matias Giannini is slated to assume the role of CEO for the venture, while Geely Holding CEO Daniel Li will serve as the chairman of the board. Giannini brings with him prior experience as a global sales executive at Vitesco Technologies, a powertrain business separated from automotive supplier Continental. Although anticipated since the start of the year, regulatory clearance in China encountered delays, postponing the venture's launch at least three times.