After long months of waiting and negotiations, the Saudi oil giant Aramco announced on Friday, June 28, 2024, its entry into the capital of Horse Powertrain, the joint venture between Renault and the Chinese car manufacturer Geely dedicated to thermal and hybrid technologies.
The world’s number one oil company will finally acquire 10% of Horse’s shares, valuing the new equipment manufacturer at 7.4 billion euros. The two car manufacturers will each retain 45% of the capital. This agreement comes less than a month after the official creation of the company, which has around 19,000 employees at seventeen production sites worldwide.
Read also: Why Renault is opening its doors to the Chinese Geely
Leveraging Aramco’s research capabilities
In a press release, the CEO of the Renault group, Luca de Meo, argues: “Decarbonizing the automotive industry will not happen alone.” Aramco’s presence would allow it to take advantage of its “a global network of R&D (research and development) centers where research is conducted on synthetic fuels, hydrogen and the optimization of thermal engines.”
According to Bernard Jullien, lecturer in economics at the University of Bordeaux and specialist in the automobile industry, these financial maneuvers above all allow the Renault group to ” continue to promote as best it can thermal technologies destined to be decommissioned in favor of energyelectric ».
Read also: The end of thermal engines is for 2035, but what will become of our petrol and diesel cars?
Helping Renault invest in electrification
Horse Powertrain is aiming to produce 5 million engines per year and a forecast annual turnover of 15 billion euros. Alone, Renault would no longer have the means to maintain research on a subject that is less strategic than it could have been before.t », adds the economist.
For the French group, and despite its rapid post-covid recovery driven by increased sales and a reduction in its production costs, the sum provided by this agreement will not be too much to make the investments necessary for the transition to electrification. But Bernard Jullien qualifies: ” Ampere (another Renault subsidiary launched last November with Nissan, dedicated to electric models) was ultimately not introduced on the stock market due to lack of valuation. For the time being, this strategy of complicated financial structures does not seem to me to be crowned with success . »
