Renault And Geely Finalises ‘HORSE Powertrain’ JV To Produce ICEs

The automotive industry is going through a revolution through the introduction of Electric Vehicles (EVs). Many EVs have debuted and many major car automakers have shifted from internal combustion engines (ICEs) to EV powertrains. 

Despite this, it seems French automaking giant Renault (Renault Group) reckon the ICE still has a future, and it’s not alone. In fact, said French automaking group had initiated a partnership with Chinese automaking group Geely last year to jointly develop and manufacture ICE.

Recently, said joint Sino-French joint venture was finalised by both parties, and this joint effort has been christened as ‘HORSE Powertrain’. Through which, both Renault and Geely aim to produce and develop more efficient combustion engines and hybrid systems.

This move comes as other automakers increase their investment in low-emission internal combustion engine (ICE) powertrains due to a slowdown in electric vehicle (EV) sales. An example came last week when Toyota, Subaru, and Mazda came together and showed their respective sustainable ICE solutions.

The new HORSE Powertrain JV will develop, manufacture, and supply ICE (internal combustion engines) primarily to Renault and Geely brands, as well as third parties.

In their joint statement issued late last week, both Renault and Geely also emphasised the need for diverse powertrain technologies to achieve successful decarbonisation. Both also noted that over half of the vehicles produced by 2040 are still expected to rely on combustion engines.

Furthermore, this joint venture is a key part of Renault's strategy to compete with larger rivals by forming multiple partnerships to reduce costs and access new markets. By separating its internal combustion engine business, Renault aims to focus on EVs, which is a central component of the company's broad restructuring that includes revamping its long-standing alliance with Nissan.

For Geely, this deal fits its strategy of forming partnerships to expand beyond China. Geely’s ICE unit, Aurobay, will merge its operations into HORSE Powertrain as a result too. Matias Giannini, former global sales executive at Vitesco Technologies, will serve as the venture's CEO, while Geely Holding CEO Daniel Li will be the chairman of the board.

Geely's ICE unit, Aurobay, is set to merge into the HORSE Powertrain JV as well.

The new venture, headquartered in London, will supply powertrains to both Renault and Geely brands, as well as to third-party manufacturers. Renault and Geely project the business to generate approximately  €15 billion euros (approx. RM76.81 billion) in annual revenue and produce around five million powertrain units each year.

Though this venture was anticipated for some time, sources reportedly told Reuters that regulatory approval in China had been delayed at least three times, hence the delay. KR