Geely and Renault have now signed a joint venture (JV) agreement for their new powertrain company, following the framework agreement that was signed back in November 2022. The new powertrain company’s name has yet to be announced, but it has been revealed that it will be a 50/50 joint venture between the two companies.
As mentioned during the signing of the framework agreement, the new powertrain company will supply internal combustion engine (ICE), hybrid, and plug-in hybrid powertrains to Renault Group, Geely Auto, Volvo Cars, Proton, Nissan, Mitsubishi Motors Company, and PUNCH Torino. Through a press statement, Renault says that the new company could offer solutions for 80% of the global ICE and hybrid market.
The new company will include 17 engine plants and 5 R&D centres in 3 continents. It is expected to employ 19,000 people in total. 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 CEO, Luca de Meo said, “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!”
Subject to applicable laws and regulations, Geely Auto and Renault will enter into a long-term procurement agreement from the joint venture for ICE, hybrid and plug-in hybrids powertrains (engine and transmissions) for passenger vehicles. In addition, Renault will procure powertrains from the joint venture for light commercial vehicles as well as the development of hybrid batteries.
The new powertrain company is also open to new interested partners. At the moment, Aramco has signed a letter of intent with Renault and Geely on March 2, 2023, and is evaluating a strategic investment in this new powertrain technology company.
Geely Holding Group Chairman, Eric Li said, “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.”