Following a framework agreement announced in November, Geely and Renault Group have signed a binding 50/50 joint venture agreement to launch a new powertrain technology company. The joint company will focus on developing, manufacturing, and supplying hybrid powertrains and efficient ICE powertrains.
The joint venture will be led by Renault Group and Geely, with equal board members to formulate and execute strategies and set the direction. 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 expected to be established in the U.K.
The companies say their complementary product portfolio and regional footprint could offer solutions for 80% of the global ICE and hybrid market. At launch, the new company is expected to supply multiple industrial customers, including Renault Group, Geely Auto, Volvo Cars, Proton, Nissan, Mitsubishi Motors Company and PUNCH Torino. In the future, the joint venture will be capable of providing end-to-end solutions in powertrain technologies to third-party car brands and will welcome partners to further strengthen the value chain, the companies say.
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.
Aramco, which signed a letter of intent with Renault and Geely on March 2, is evaluating a strategic investment in the new technology company. Aramco’s investment would support the growth of the company and contribute to key research and development across synthetic fuels solutions and next-gen hydrogen technologies.