Geely, an oil business, may invest in the Renault engine industry, according to reports.
Geely Automobile Holdings and an oil corporation are in discussions to acquire holdings in the fossil-fuel engine unit. Renault wants to split from its electric vehicle (EV) business, according to two people close to the French automaker.
The sources told Reuters that Renault’s alliance partner, Japanese automaker Nissan, had no plans to invest in the combustion engine sector.
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Renault and Geely declined to comment. Nissan did not reply to a request for comment immediately. This fall, the French automaker will say that it wants to set up an EV-dedicated unit in France and a second unit overseas that would bring together all of its gasoline and hybrid engine and transmission production facilities in Spain, Portugal, Turkey, Romania, and Latin America.
Renault wants to keep control of its “Ampère” electrical business, which will employ about 10,000 people and could go public in the second half of 2023.
But it will only keep a small share of its “Horse” combustion engine company, which will have a similar staff. It will still be a major reference shareholder with a lot of power in the unit, though.
According to two reports, Renault would own 40% of the fossil-fuel engine unit, Geely would own 40%, and an oil corporation would own the other 20%. But the strategy hasn’t been finished yet, and one source says that “there are other ways for partner manufacturers to go.”
Two sources say that this would leave Nissan out of the deal, even though Renault had suggested including Nissan. This shows that the strategies of the alliance partners are still different.
Related: China has plans to increase car sales and may keep the tax break for electric vehicles (EVs).
The alliance’s long-term viability has been dubious since the 2018 dismissal of former leader Carlos Ghosn. In 2026, more than 80% of Renault, Nissan, and Mitsubishi’s models will be built on shared designs, although the 2030s remain uncertain.
SHARING COSTS
A partnership with Geely would contribute to the growth of the Chinese automaker’s company. Geely owns Volvo Cars of Sweden, the British sports car manufacturer Lotus, and Mercedes.
Renault intends to free up capital to spend on electric cars, a technology it pioneered alongside Nissan and Mitsubishi, but in which it has slipped behind Tesla
One source stated that the cooperation of an oil corporation would aid in the development of green hydrogen and the infrastructure necessary to make hydrogen fuel cell cars competitive with battery-powered EVs. Hydrogen is categorised as “green” when it is produced using renewable energy, and it is viewed as essential to decarbonizing industry. Alongside its longstanding relationships with Nissan, Mitsubishi, and Mercedes, Renault has lately forged new partnerships as part of a radical reorganisation designed to improve its financial standing. In May, the French automobile manufacturer sold Geely 34% of its South Korean business. Renault will collaborate with Geely to create hybrid vehicles at its Busan facility.
