As Volvo is moving towards full electrification of their entire model range, the Swedish marquee together with its parent-company Geely is looking to merge their combustion engine operations into a standalone business. 

The new business will be focused on developing next-generation efficient combustion and hybrid powertrains that would be available to Geely’s stable of brands including Geely Auto, Lotus, LEVC, Lynk and Co, and our national carmaker Proton. It will also look to supply powertrain to third party manufacturers as a new business opportunity.

The new entity will consist of approximately 3,000 current employees from Volvo and 5,000 from Geely’s combustion engine operation, with no workforce reduction anticipated. The companies have begun separating their combustion powertrain operation ahead of the merger. 

Volvo said that the move will allow it to focus on the development of their fully electric powertrains. As reported previously, the Swedish carmaker is expecting 50% of its global sales to be fully electric vehicles. Volvo will be launching the XC40 EV, their first step to realising the new direction. 

While Volvo is moving towards full electrification, the company still believes that combustion engine will play a huge role in their offerings. The company believes that the electrification of the automotive industry will be gradual, therefore ongoing demand for efficient hybrid powertrains is expected to be substantial. 

Volvo Cars’ president and chief executive, Håkan Samuelsson said, “Hybrid cars need the best internal combustion engines. This new unit will have the resources, scale and expertise to develop these powertrains more cost effectively.”

Volvo and Geely has already worked together on combustion engines previously, with the 1.5-litre turbocharged 3-cylinder engine used in the Geely Binyue, expected to be launched as the highly-anticipated Proton X50. This move could possibly spell a hybrid future for our own national carmaker – who knows.

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