Geely Holding Group (Geely Holding), Geely Automobile Holdings and the Renault Group have signed a non-binding framework agreement to create a new global leader to develop, manufacture and supply best-in-class hybrid powertrains and highly efficient internal combustion powertrains (ICE).

On completion, the new company will be a standalone global supplier of complete ICE solutions, producing next-generation hybrid propulsion systems and developing low-emission technologies.

Five million IC, hybrid, PHEV engines and transmissions a year
The new company is planned to operate 17 plants in the Americas, Asia and Europe, employing around 19,000 people in total and to produce around 5 million internal combustion, hybrid and plug-in hybrid engines and transmissions per year. At launch, the new company is expected to supply multiple industrial customers including Volvo Cars, Renault, Dacia, Geely Auto, Lynk & Co and Proton. The partnership can also offer powertrain technologies to other car brands.

The new company will welcome new industrial and financial partners attracted by the opportunity to contribute to industry-leading lifecycle (or ‘cradle-to-grave’) low- and zero-emission eco-systems worldwide, and the opportunity to create value in the ongoing transformation of the automotive industry.

Aurobay has been leading the way in the development of low- and zero-emission combustion engines since it was established in July 2021, with a strong focus on sustainability and a lifecycle approach to emissions. Aurobay, with its 2,850 employees in Sweden and China and its unique R&D and manufacturing capabilities, will be able to make a strong contribution to the new business.

“The auto industry’s strong focus on electric vehicles will not be enough to reach the CO2 reduction targets. Electrification is just one of several solutions required to reach global net zero vehicle emissions targets. In many parts of the world, there will neither be enough fossil free electricity nor enough charging infrastructure to allow for rapid electrification. According to industry estimates, in 2040, 55-75 percent of all cars on the road will still be ICE or hybrid-powered”, says Michael Fleiss, deputy CEO of Aurobay.

“Many automakers are concentrating on electric powertrains and will lose focus on ICE and hybrid systems. The new company will be there to develop and supply state-of-the-art products. We will have the size, the know-how and the capability to develop and manufacture low- or zero-emission hybrid engines on a scale that will reduce the global carbon footprint substantially,” says Michael Fleiss.

Also, Volvo Cars has decided to transfer its current equity stake (33%) in Aurobay to Geely Holding. Aurobay remains the sole provider of both Volvo Cars’ hybrid and combustion engines. 

“Volvo Cars and Aurobay will remain strategic partners. Our 100 years of common history is a firm platform on which to build future collaboration,” says Michael Fleiss.

In 2021, Aurobay produced 750,000 hybrid engines and electric motors in its manufacturing sites in Skovde, Sweden and Zhangjiakou, China.

Lead image courtesy: Aurobay