Renault-Geely JV could develop own engines by 2026, executive says

MUNICH -- The joint venture between Renault Group and Geely to develop and produce internal combustion engines could develop its own, common engines as early as 2026, executives said at the IAA Mobility auto show here.

At the moment, the agreement is undergoing review by the competition authorities, said Ingo Scholten, vice president and chief technical officer Geely powertrain research. That process is expected to be completed by year-end. 

The new company -- a name has not been announced -- would come into existence once approval is granted.

Geely has been producing combustion engines for brands such as Volvo, Proton and Lynk & CO since 2022 through a subsidiary called Aurobay, which is based in Gothenburg, Sweden. It was one of the first automakers to spin off combustion-engine activities as it navigates the transition to electrifications.

Automakers have been weighing how to manage their internal-combustion businesses as EVs gain market share. Electric vehicles have fewer moving parts and require fewer workers to build, raising concerns about mass layoffs in the coming decades.   

Saudi Aramco is evaluating a potential strategic investment in the new Renault-Geely company as a minority stakeholder. Aramco’s investment would support research into e-fuels and hydrogen technologies that could be used in internal-combustion engines. Both fuels have been proposed as low- or zero-carbon emissions replacements for fossil fuels, and e-fuels have been granted an exemption to the EU’s 2035 deadline for automakers to sell only zero-emissions cars.

Renault’s side of the joint venture, called Horse, started operations on July 1. It has about 9,000 employees, eight manufacturing sites and three R&D centers, and is based in Madrid. It builds engines for Renault, Dacia and Nissan. 

Aurobay and Renault executives have expressed optimism about the future of their joint venture, saying that 50 percent of global cars sold in 2040 will still have internal-combustion engines, as well as the vast majority of existing vehicles.

When the new company starts operations, the Renault and Geely sides will continue to build their own engines in their own factories for several years, Scholten said. New, common engines should appear in 2026 or 2027, he said, increasing efficiencies and saving money on development, parts and production costs.

Geely and Renault have said the JV will have an annual production capacity of more than five million internal combustion, hybrid and plug-in hybrid engines and transmissions.