Reuters reported, quoting three informed sources, that Renault and China’s Geely Automobile Holdings are finalizing a contract with Saudi Aramco as an investor and partner to develop and supply gasoline engines and hybrid technologies.
The sources stated that Aramco entered into advanced discussions to acquire a stake of up to 20% in the powertrain technology company for Geely and Renault, which had previously been announced and the two companies are working to establish it.
According to a document prepared by the two companies and seen by Reuters, the goal is to establish a powertrain company this year with a production capacity of more than 5 million low-emissions, hybrid engines and transmissions annually.
The sources indicated that Renault and Geely will each have a 40% stake in the joint venture, which is set to combine part of Renault’s current production of combustion engines with Geely technology for gasoline and hybrid engines and related assets.
She added that the new joint venture aims to develop more efficient gasoline engines and hybrid systems, at a time when most of the auto industry’s capital-intensive focus is on switching to purely electric vehicles.
Reuters said that the financial terms for the potential investment by Saudi Aramco in the joint venture are not yet known, pointing out that the document states that the investment will be used to support the development of technologies to reduce carbon emissions for gasoline engines.
She added that Aramco will also contribute to the research and development of powertrain technologies, especially synthetic fuel solutions and next-generation hydrogen technologies.