Geely and Renault to form alliance for hybrid and ICE powertrains
Chinese automaker Geely Holding Group and Geely Automobile Holdings Limited, collectively referred to as Geely, and French automaker Renault Group have signed a non-binding framework agreement to create a new global leader to develop, manufacture and supply best-in-class hybrid powertrains and highly efficient internal combustion engine (ICE) powertrains.
Under the framework agreement, Geely and Renault Group will own 50-50 equity stakes in the new company. This framework agreement is expected to lead to the formal combination in 2023.
The new company will be a standalone global supplier of propulsion system solutions, producing next generation hybrid propulsion systems, and developing carbon-free and low-emission technologies from five global R&D centres. At launch, the new company is expected to supply multiple industrial customers including Renault, Dacia, Geely Auto, Volvo Cars, Lynk & Co, Proton, and also Nissan and Mitsubishi Motors Company. In the future, the partnership could also offer powertrain technologies to third-party car brands.
The new company plans to operate 17 powertrain plants in three continents, employing around 19,000 people in total. It will have a combined capacity of more than five million internal combustion, hybrid and plug-in hybrid engines and transmissions per year, supplying more thn 130 countries and regions. The new company’s joint product portfolio and regional footprint could offer solutions for 80% of the global ICE market.
News of this agreement coincided with a Renault Group Capital Market Day in Paris, France, on November 8, where Renault outlined a range of initiatives to speed-up its transformation and shared its mid-term financial outlook.
“As Renault Group accelerates with its Renaulution transformation to capture value on the entire new automotive value chain, we are pleased to have agreed plans for an ambitious partnership with Geely to keep developing the ICE and hybrid engine technologies that will remain a critical part of the automotive supply chain for decades to come. We’ll be able to offer best-in-class powertrain and electrified solutions to multiple OEM brands worldwide, unleashing the market potential for this low emission technology,” said Luca de Meo, CEO of Renault Group.
“Today’s agreement with Renault Group will enable the creation of a global leader in hybrid technologies to provide highly efficient advanced solutions for automakers around the world. We are looking forward to working together with Luca de Meo and his Renault team to make this partnership a reality. This agreement builds on our commitment to leverage our group wide technological expertise and brand portfolio to continue our pioneering journey in sustainability and value creation that leads to consumer excellence,” said Eric Li, Geely Holding Group chairman.
The new company will welcome partners and shareholders attracted by the opportunity to contribute to industry-leading “cradle-to-grave” low- and zero-emission eco-systems worldwide.