Three informed sources said that the French “Renault” and the Chinese “Geely Automobile Holdings” are finalizing a deal to attract oil-producing Saudi Aramco as an investor and partner for the development and supply of gasoline engines and hybrid technologies.
The three people told Archyde.com: The Saudi oil production company has entered into advanced discussions to acquire a stake of up to 20 percent in the previously announced powertrain technology company for Geely and Renault, and the two automakers are working to establish it, but its name has not been announced yet.
A document prepared by the two companies and seen by Archyde.com said the aim is to create a powertrain company this year with a production capacity of more than five million “low-emissions, hybrid engines and transmissions” annually.
The sources told Archyde.com that the investment by Aramco will be left to both Renault and Geely 40 in the joint venture, which is set to combine the French carmaker’s current production of combustion engines with Geely’s gasoline and hybrid engine technology and related assets.
Two of the sources said the new joint venture – codenamed “Horse” by Renault and “Rubik” by Geely – aims to develop more efficient petrol engines and hybrid systems at a time when much of the auto industry is focused on capital intensiveness. On switching to pure electric cars.
The financial terms of Aramco’s potential investment in the joint venture are not yet known.
The document states that Aramco’s investment will be used to support the development of carbon-lowering technologies for gasoline engines.
The document said that Aramco will also contribute to the research and development of powertrain technologies, especially synthetic fuel solutions and next-generation hydrogen technologies.
The sources, who described the outlines of the deal being negotiated, asked not to be named because it has not been announced yet.
And last year, Aramco announced a partnership with Hyundai Motor Company to study advanced fuels that might be used in hybrid engines to reduce automobile carbon dioxide emissions.
Awaiting the approval of the Board of Directors
One of the sources said the oil company’s deal with Geely and Renault still needed approval by the two automakers’ boards of directors. The three companies are working on completing a letter of intent in the coming weeks, according to one of the sources.
Geely and Renault said last year when they announced the new venture: It will employ 19,000 people in 17 powertrain plants and three research and development centres.
By cutting off its internal combustion engine business, Renault plans to focus on electric vehicles as part of the French automaker’s effort to renew its alliance with Nissan Motor Co. As part of this, Renault is trying to convince Nissan to invest in its new electric car unit.
For Geely, the deal with Renault extends its approach to building partnerships to expand beyond China.
Geely previously announced a petrol-hybrid engine development deal with Mercedes-Benz and owns a stake in the German automaker.
And the joint venture between Geely and Renault isn’t the only company investing in the view that fuel-efficient hybrid cars will remain part of the mix even as more automakers roll out electric cars.
Akio Toyoda, CEO of Toyota Motor Corp., has defended his company’s continued investment in hybrid cars, such as the Prius, saying that electric vehicles are still too expensive and the charging infrastructure is incomplete.
(Archyde.com)
