French automaker Renault and Chinese partner Geely announced a new joint venture on Friday aimed at developing more efficient gasoline engines and hybrid systems, bolstering their legacy auto business.
The venture, named HORSE Powertrain, will focus on creating advanced combustion and hybrid engines to enhance competitiveness in the evolving automotive landscape. This move comes as rival automakers increase investment in low-emission powertrains due to a slowdown in electric vehicle sales.
“A combination of various powertrain technologies is necessary … to achieve a successful decarbonization in a world where more than half of vehicles produced are expected to still rely on combustion engines by 2040,” Renault and Geely said in a joint statement.
Renault’s strategy to stay competitive involves forming partnerships to reduce costs and enter new markets. By concentrating on electric vehicles, Renault aims to modernize its alliance with Nissan Motor.
For Geely, this joint venture expands its international footprint, building on previous partnerships such as a hybrid gasoline engine development deal with Mercedes-Benz and holding a stake in the German automaker.
The new venture, headquartered in London, will supply powertrains to Renault, Geely, and other manufacturers. With an expected annual revenue of about 15 billion euros ($16.2 billion), the venture aims to produce approximately five million powertrain units per year.
Matias Giannini, a former global sales executive for Vitesco Technologies, will lead the venture as CEO, with Geely Holding CEO Daniel Li serving as chairman of the board.
The formation of the joint venture, initially expected earlier this year, was delayed due to regulatory approval processes in China.
