Following the framework agreement announced in November 2022, Geely Holding Group, Geely Automobile Holdings Limited and Renault Group have signed a binding 50/50 joint venture agreement to launch a new powertrain technology company that aims to become the global leader in developing, manufacturing and supplying best-in-class hybrid and ICE powertrains, the companies said.
Aramco, which signed letter of intent with Renault and Geely on March 2, is evaluating a strategic investment in the new powertrain technology company. Aramco’s investment would support the growth of the company and contribute to key research and development across synthetic fuel solutions and next-gen hydrogen technologies, the companies said. Synthetic fuels, including e-fuels and hydrogen, are part of the solution for decarbonation in the automotive industry, including for the ICE vehicles on the road today.
The joint venture will be jointly led by Renault Group and Geely, with equal board members to formulate and execute strategies and set the JV’s direction. The initial organization will secure the continuity of the business with two operational centers in charge of the respective operations: Madrid for Renault Group and Hangzhou Bay for Geely. 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.
Renault Group and Geely said they will transfer intellectual property to the operational centers enabling them to be fully autonomous in developing future powertrain technologies capable of addressing all market expectations. The new JV’s product portfolio and regional footprint could offer solutions for 80% of the global ICE and hybrid market, according to the companies.
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, the joint venture will be capable of providing end-to-end solutions in powertrain technologies to third-party car brands and will welcome partners to further strengthen the value chain.
Subject to applicable laws and regulations, Geely Auto and Renault will enter into a long-term procurement agreement In addition, Renault will procure powertrains from the joint venture for light commercial vehicles as well as the development of hybrid batteries.
“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,” said Luca de Meo, CEO of the Renault Group.
“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,” said Eric Li, Geely Holding Group chairman. “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.”