Saudi Arabian oil giant Saudi Aramco is revving up its partnership with the automotive industry by acquiring a 10% stake in Horse Powertrain, a joint venture established by French carmaker Renault and China's Geely. The deal, announced on June 28th, 2024, values the venture at €7. 4 billion ($7. 93 billion).
Horse Powertrain, formed in May 2024, focuses on developing and supplying gasoline engines, hybrid systems, and gearboxes for traditional combustion vehicles. This strategic alliance brings together Aramco's expertise in the oil and gas sector with Renault and Geely's established presence in the global automotive market.
The agreement is expected to benefit all parties involved. Aramco's investment signifies a vote of confidence in the future of efficient internal combustion engines (ICEs) and hybrid powertrains. The company believes the collaboration will contribute to the development of cleaner and more affordable engine technologies, potentially extending the lifespan of these traditional options in the face of the ongoing electric vehicle (EV) revolution.
For Renault and Geely, Aramco's involvement brings significant financial resources and potentially valuable insights into fuel technology. The partnership could accelerate the development of next-generation ICEs that comply with stricter emission regulations and offer improved fuel efficiency.
Industry analysts suggest this deal could act as a safety net for legacy automakers like Renault, providing stability for investments in combustion engine technology during a period of rapid transition towards EVs. While the future of transportation undoubtedly lies in electrification, ICEs are expected to remain a significant player in the global automotive market for the foreseeable future, particularly in regions with limited EV infrastructure or high upfront costs for electric cars.
Furthermore, the collaboration between Aramco, Renault, and Geely could lead to advancements in hybrid technology, potentially bridging the gap between traditional ICEs and fully electric vehicles. Hybrid powertrains offer a combination of gasoline or diesel engines with electric motors, providing both performance and fuel efficiency benefits.
The agreement also includes a partnership between Horse Powertrain and Valvoline Global, a leading supplier of lubricants and automotive maintenance services. This collaboration underscores the commitment of all parties involved to develop and deliver a comprehensive solution for future internal combustion and hybrid vehicles.
The ripple effects of this deal extend beyond the immediate participants. It signals a continued role for traditional fuel sources and technologies in the global automotive landscape, albeit with a strong emphasis on efficiency and environmental responsibility. The combined expertise of Aramco, Renault, and Geely has the potential to shape the future of internal combustion engines and hybrid powertrains, ensuring they remain relevant and competitive in the ever-evolving transportation sector.