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!”
De Meo said no one can claim to have all the solutions, alone, to the challenges the automotive industry faces. "Coming up with breakthrough innovations requires to combine expertise and assets. When it comes about the global race for decarbonizing road transports, there is no time to lose, and it will not be business as usual."
Renault Group and Geely will have equal board members on the new company to formulate and execute strategies and set the direction for the joint venture.
The initial organization will secure the continuity of the business with two operational centres in charge of the respective operations: Madrid for Renault Group and Hangzhou Bay for Geely.
The UK will become the home for its executive team, who'll be tasked to consolidate operations, build on synergies, and define future plans.
Eric Li, Geely Holding group chairman, said: “We are pleased to be embarking on this journey to become a global leader in hybrid technologies, providing low-emission solutions for automakers around the world. We are looking forward to working with Luca de Meo and his Renault team.
"With this agreement, we reiterate our commitment to leveraging our group-wide technological expertise and brand portfolio to pioneer the journey to greater sustainability and value creation which will lead to better consumer experiences.”