Aramco to invest in powertrain technology company with Geely, Renault

After completing its USD2.65 billion acquisition of Valvoline Global Products last week, the Saudi Arabian Oil Company (Aramco), Saudi Arabia’s global integrated energy and chemicals company, announced that it will form a new powertrain technology company with partners Chinese automaker Geely and French automaker Renault. The new company will be dedicated to internal combustion and hybrid powertrain technologies. 

These two automakers together sold more than four million vehicles last year. The new company aims to have an annual production capability of more than five million internal combustion, hybrid and plug-in hybrid engines and transmissions per year. According to the European Automobile Manufacturers Association (ACEA), 79.1 million motor vehicles are produced globally every year. In 2022, Japanese automaker Toyota Motor Corp. sold 10.5 million vehicles, making it the world’s top-selling automaker for a third straight year. German automaker Volkswagen Group was second with 8.3 million vehicles sold, its lowest sales in more than a decade, as Covid-19 lockdowns in China and the war in Ukraine disrupted supply chains.

Aramco’s investment, details of which have not yet been revealed, would support the development of synthetic fuel solutions, and next-generation hydrogen technologies.

A letter of intent to become a potential minority stakeholder in the new powertrain technology company (PWT) to be established by Geely Holding and Renault Group has been signed, Aramco announced. It is expected that Geely and Renault Group will retain equal equity stakes in the new independent entity.

Zhejiang Geely Holding Group (Geely Holding) operates a number of brands including Geely Auto, Lynk & Co, ZEEKR, Geometry, Volvo Cars, Polestar, Lotus, London Electric Vehicle Company, Farizon Auto, and Cao Cao Mobility. Geely Holding sold more than 2.3 million vehicles in 2022, with Volvo Cars sales reaching 615,121 units globally and Geely Auto Group’s Hong Kong listed entity reported sales of 1,432,988 units.

Renault Group, on the other hand, which is strengthened by its alliance with Nissan and Mitsubishi Motors, and its unique expertise in electrification, comprises four complementary brands Renault, Dacia, Alpine and Mobilize. Last year, Renault Group sold 2.1 million vehicles.

With a global network of 17 powertrain plants and five R&D centers across three continents, the planned company is intended to be a standalone global supplier with a combined capacity of more than five million internal combustion, hybrid and plug-in hybrid engines and transmissions per year, supplying more than 130 countries and regions.

“This partnership with Aramco will raise our joint powertrain company together with Geely Group to the next level and give it a head start in the race towards ultra-low-emissions ICE powertrain technology. Aramco’s entry brings to the table unique know-how that will help develop breakthrough innovations in the fields of synthetic fuels and hydrogen,” said Luca de Meo, CEO of Renault Group.

“We welcome Aramco in joining us in the creation of a globally leading sustainable powertrain company. The proposed investment by Aramco represents recognition from global industry leaders in the PWT’s future business prospects and vision for pioneering low and carbon-free fuels such as methanol and hydrogen,” said Daniel Li, CEO of Geely Holding Group. 

“This letter of intent represents a new milestone in our ongoing commitment to transportation technologies and presents a platform to support Aramco’s research and development in engine innovation. Our planned collaboration with Geely and Renault would support the development of powertrains across the automotive industry, and align with our broader efforts across our global operations,” said Mohammed Y. Al Qahtani, executive vice president of Aramco Downstream.