Renault and the Chinese giant Geely have agreed to create a joint venture that will be responsible for developing internal combustion engines and hybrid technology, both for their respective brands and third parties. This association is a key part of Renault’s plans to separate its thermal engine business.
The new entity will have 19,000 employees spread over 17 factories and 3 R&D centers. At the moment, only a non-binding preliminary agreement has been reached, although both companies aspire to reach a final agreement for next year when the new joint venture will be officially launched.
Geely and Renault will respectively control 50% of the company, whose headquarters will be located in London. One of the aspects that both partners still have to solve is the treatment of the intellectual property of Nissan, a historical ally of Renault that does not see favorably that its technology ends up in the hands of the Geely group.
Despite everything, it should be noted that Renault’s E-TECH hybrid systems are self-developed, so everything indicates that the joint venture could use them without any problem. In addition, Geely and Renault hope to supply gasoline engines and hybrid systems to both Nissan and Mitsubishi, the third member of the Renault-Nissan-Mitsubishi Alliance.
This alliance will allow Renault to allocate more funds to the development of electric cars
The production capacity of the new company will be about 5 million propulsion systems per year. Thanks to this union, Renault will be able to reduce the costs associated with its thermal car business, freeing up more funds to develop its new electric range, as it aspires to exclusively sell models of this type in Europe from 2030.
A few months ago Geely already acquired 34.02% of the South Korean division of the diamond firm ( Renault Korea Motors, known for marketing cars under the Samsung brand); In addition, both manufacturers have a collaboration agreement for the development and marketing of hybrid vehicles in China and South Korea.
This movement has been announced amid the restructuring process of the Renault Group, which today will finalize its plans to create an independent unit dedicated to the development of electric cars, which will be listed on the stock market separately. Nissan and Mitsubishi are evaluating the possibility of investing in this new division, known until now under the name Ampère.