Renault Group and Geely have signed a joint venture agreement, giving each company a 50% stake in the new company, which aims to become a leader in next-generation hybrid and high-efficiency drive solutions to meet global demand for years to come.
• As already reported on March 2, 2023, following the signing of a preliminary agreement between Aramco, Geely and Renault Group, Aramco is evaluating strategic investment opportunities in this new propulsion technology company.
• The new company will include 17 engine factories and five R&D centers on three continents with 19,000 employees in a comprehensive, efficient organization strategically structured to provide powertrain solutions to many OEMs, with an attractive business model for attracting new partners.
• The equity ownership of the joint venture will be managed jointly by Renault Group and Geely.
• This joint venture aims to provide an annual production capacity of up to five million internal combustion, hybrid and plug-in hybrid engines and transmissions per year. It will supply many brands worldwide with a full range of best-in-class powertrains.
• The transaction is expected to close in the second half of 2023 and is subject to the rules that normally apply to transactions of this type – specifically, obtaining prior approval from the relevant antitrust and foreign direct investment regulatory authorities.
Hong Kong Special Administrative Region (Hangzhou, HongKong SAR), China and Boulogne-Billancourt, France – Pursuant to a framework agreement reported in November 2022, Geely Holding Group (Geely Holding), Geely Automobile Holdings Limited (Geely Auto HK.0175) (the companies collectively referred to as “Geely”) and Renault Group today signed a binding 50/50 joint venture agreement to create a new drive technology company. which aims to become a global leader in the development, production and supply of hybrid drives and high-efficiency internal combustion engine drives.
Aramco, which signed a preliminary agreement with Renault and Geely on March 2, 2023, is evaluating strategic investment opportunities in this new propulsion technology company. Aramco’s investment will support the growth of this company and support key research and development in synthetic fuel solutions and next-generation hydrogen technologies. Synthetic fuels, including biofuels and hydrogen, are part of the solution to decarbonizing the automotive industry, including the internal combustion engine cars on the road today.
This joint venture will be jointly managed by Renault Group and Geely, with an equal number of board members formulating and implementing strategies and setting the direction of the joint venture. The initial organization will ensure the continuity of the company with two management centers that will be in charge of the relevant activity: Renault Group in Madrid, Geely in Hangzhou Bay. The heads of the business units will work at the head office of the new company, which is to be established in the UK, to consolidate the management of the company, create synergies and define future plans.
Renault Group and Geely will transfer the intellectual property to the control centers, allowing them to develop completely independently future drive technologies that will be able to meet all market expectations. The new joint venture’s additional product portfolio and regional footprint could offer solutions for 80% of the global internal combustion and hybrid engine market. Once established, the new company is expected to supply a wide range of industrial customers, including Renault Group, Geely Auto, Volvo Cars, Proton, Nissan, Mitsubishi Motors Company and PUNCH Torino. In the future, this joint venture will be able to provide end-to-end drive technology solutions for third-party automotive brands and will attract partners to further strengthen this value chain.
In accordance with the requirements of applicable laws and regulations, Geely Auto and Renault will conclude a long-term procurement agreement with this joint venture for the purchase of internal combustion, hybrid and plug-in hybrid drives (engines and transmissions) for passenger cars. In addition, Renault will purchase drives for light commercial vehicles from the joint venture, as well as order the development of hybrid batteries.
Luca de Meo (Luca de Meo), CEO of Renault Group:
“Faced with today’s challenges in automotive manufacturing, no one can claim that they alone have all the solutions. The creation of revolutionary innovations requires the pooling of knowledge and resources. In terms of global competition, there is no time to lose in decarbonising land transport and this will not be business as usual. Today, we are proud to join forces with such a great company as Geely to create a new market player capable of changing the course of events according to the scale of the challenge and paving the way for ultra-low emission internal combustion engine technologies. I would like to thank Eric Li Shufu for his trust – now we are ready to move forward!”
Eric Li, Chairman of Geely Holding Group, said:
“We are excited to embark on this journey to become a global leader in hybrid technology, providing low-emission solutions to automakers around the world. We look forward to working with Luca de Meo and his Renault team. This agreement reaffirms our commitment to use our group-wide technological expertise and brand portfolio to lead the way towards greater sustainability and value creation that will create a better consumer experience.”
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2023-07-24 11:12:35
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