Renault Group and Geely have created a new powertrain technology company intended to “disrupt” the sector with ultra-low emission hybrid and combustion engines.

The new company will “lead the market” for hybrid and combustion powertrain components and systems

Dubbed Horse Powertrain Limited, the business will design, develop, produce and sell hybrid and combustion powertrain solutions and systems with “state-of-the-art” technologies including engines, transmissions, hybrid systems and batteries.

The business is headquartered in London and will produce around five million hybrid and internal combustion powertrains a year for parent firms Renault Group and Geely Auto, as well as associated carmakers such as Volvo, Proton, Nissan and Mitsubishi.

The JV was announced as part of the Renault Group’s Renaulution plan and the two companies signed agreements in July 2023.

Following approval by the relevant authorities, Horse Powertrain Limited has now officially been created, hiving off Renault’s former Horse business and Geely’s Aurobay engine and transmission company into a completely autonomous business that will “benefit from immediate scale effect and market coverage enhancement”. It will also hit the ground running with 17 global plants, five R&D centres, around 19,000 employees and an expected c.€15bn (£12.8bn) in yearly revenues.

The French and Chinese parent firms say that successful decarbonisation in a world where more than half of vehicles produced are expected to still rely on combustion engines by 2040 will require a combination of various powertrain technologies, including highly efficient internal combustion engines, lower carbon e-fuels and hydrogen.

Powertrain train technologies will include full hybrids and long-range plug-in hybrids as well as internal combustion engines that use alternative fuels such as ethanol, methanol, LPG, CNG and H2 etc.

The joint venture’s complementary product portfolio and regional footprint could offer solutions for 80% of the growing global hybrid and combustion powertrain market.

Luca de Meo, CEO Renault Group, declared: “Today marks an important step in meeting the greatest challenges facing the automotive industry: the decarbonisation of road transport. Partnering with a leading company such as Geely to create a new player with the capability and expertise to develop ultra-low emission internal combustion engines and high economy hybrid technologies is key for the future. Through Horse Powertrain, Renault Group can achieve worldwide leadership and scale in a sector representing more than 80% of its business. Together we will rise to meet the decarbonisation challenge with innovation at the forefront of our operations.”

Eric Li, Geely holding chairman, picked up: “For the industry to reach net zero emissions in the next decades, global synergies, multiple technologies, and sharing of expertise, are crucial. That is why we are pleased that our partnership with Renault Group is reaching commercial reality today.”

“Horse Powertrain Limited will have the portfolio, scale and capacity to offer the low-emission solutions the automotive industry of tomorrow demands. Today’s launch marks a new chapter in sustainable mobility, and we at Geely are proud to play a part.”

Renault Group and Geely’s new business goes live just days after Subaru, Toyota and Mazda committed to developing new internal combustion engines tailored to electrification and the pursuit of carbon neutrality. The trio said in a joint conference earlier this week that they would forge a path towards carbon neutrality by drawing on electric drive units, synthetic fuels and more compact engines, alongside their existing EV endeavours.