Geely, Renault to build 50/50 joint venture for R&D, production of advanced powertrains

Shanghai (Gasgoo)- Following the framework agreement announced in November 2022, Geely Holding Group and Geely Automobile Holdings Limited (hereinafter referred to as "Geely") have signed a binding joint venture agreement with Renault Group in a 50:50 partnership, Geely Holding announced on July 11.

Under the agreement, the contracting parties will establish a new company (or “joint venture”) that will globally develop, manufacture, and supply advanced hybrid powertrains and efficient fuel powertrains.

Photo credit: Geely Holding

On March 2, 2023, Saudi Aramco signed an investment memorandum of understanding with Geely and Renault Group, and is currently evaluating strategic investment in the new powertrain technology company in the second half of 2023. Saudi Aramco's investment is expected to drive the development of the joint venture and support the R&D of synthetic fuel solutions and key technologies for the next-generation hydrogen power. Synthetic fuels such as e-fuels and hydrogen fuel can promote decarbonization in the automotive industry and facilitate low-carbon development of fuel-powered vehicles.

The new company will be jointly led by Geely and Renault Group, with an equal representation on the board of directors, to jointly formulate and execute the company's development strategy. During the initial phase of operation, the joint venture will ensure business continuity through two operating centers: Renault Group's center in Madrid and Geely's center in Hangzhou Bay. In addition, the new company will be headquartered in the United Kingdom, where a management team will be established to integrate operations, seek synergies, and determine future development plans.

The new company will have five R&D centers and 17 factories in Europe, Asia, and South America, with a total of approximately 19,000 employees.

Geely and Renault Group will transfer relevant intellectual property rights to their respective operating centers, enabling the joint venture to independently develop future powertrain technologies to meet various market demands. With complementary product portfolios and a global business layout, the new company's products will cover 80% of the global demand for fuel-powered and hybrid-powered automotive applications. Once operational, the new company will provide services to multiple brands, including Renault, Geely, Volvo Cars, Lynk & Co, Nissan, Mitsubishi Motors Corporation, and PUNCH Torino Powertrain. In the future, the joint venture will offer a full range of powertrain solutions to more third-party automotive brands and continue to welcome new partners to create greater value space together.

The new company will have an annual production capacity of over five million sets of engines and transmissions, including traditional and hybrid powertrains, to provide top-quality powertrain products for multiple global brands.

In compliance with relevant laws and regulations, Geely Automobile and Renault will engage in long-term procurement cooperation with the new company, procuring passenger vehicle-dedicated engines and transmissions, including fuel-powered and hybrid powertrains. Additionally, the new company will provide hybrid battery development services for Renault's light commercial vehicles.