Renault Group and China's Geely are set to launch a joint venture company able to produce annually up to five million efficient powertrains, including hybrids and plug-in hybrids.

The JV will have 17 engine plants and five research and development centres across three continents, and will provide powertrain technology for their own brands plus other OEMs.

It is a sign that carmakers believe there is life yet in internal combustion engines, despite the UK and Europe's mandates for electric vehicles from the 2030s.

The binding JV agreement signed by both parties will launch a company, with its headquarters in the UK, that aims to become the global leader in developing, manufacturing, and supplying best-in-class hybrid powertrains and highly efficient ICE powertrain.

Luca de Meo, chief executive of Renault Group, said: “Today, we are proud to join forces with a great company like Geely to set up a new player, up to the challenge, able to disrupt the game and open the way for ultra-low emissions ICE technologies. I want to thank Eric Li Shufu for his trust: we are now ready to move forward!”