Mercedes-Benz’s parent company Daimler will apparently be cooperating with Geely to build “next-generation combustion engines” for use in hybrid vehicles, according to a report by Reuters.
A Daimler spokesperson told the publication “the companies plan to develop a highly efficient modular engine”, adding that it would be used in hybrid drivetrains and manufactured in Europe and China. Meanwhile, Geely declined to comment when approached.
The partnership is perhaps a timely decision for the two companies, as the development cost for internal combustion engines is quickly becoming harder and harder to justify, due to the tightening emissions rules in many countries worldwide, compounded by the knock-on effect from the still-ongoing Covid-19 health pandemic.
Reuters further reports that the modular engine will be used in cars under different marques at both Geely and Daimler, according to an anonymous tip from a person familiar with the matter. The tipster added that the companies are still in the early stages of developing the engine.
A separate report on the same topic by German daily Handelsblatt further stated that most of these engines made under the partnership will be built in China. According to Daimler sources, the cooperation with Geely will reportedly help the German carmaker save a “triple-digit million sum”.
While a lot of the details still remain in the dark as of now, this cooperation does not come as a surprise to most industry experts seeing that Geely’s founder and chairman Li Shufu acquired nearly 10% of Daimler stocks back in 2018. Following the move, Daimler has also sold a 50% stake in Smart to the Chinese automotive giant, and Li has been pushing for deeper cooperation between the two companies.
It remains to be seen how the cooperation will play out in the near future. Daimler already has an engine development partnership with Renault, while Geely on the other hand has joined forces with Volvo – which Geely owns – to develop new powertrain technologies under the CEVT company.