Renault and Geely to Be Backed by State Saudi Oil Enterprise in Engines Development

According to Reuters, the French and Chinese automotive duo would share 20% of their engine-making facility with the state oil producer Aramco of Saudi Arabia. Renault and Geely have already made public their intentions to work together to manufacture gasoline and hybrid powertrains. However, their entity still needs an official name.

The news agency claims that Aramco's involvement in the project as an investor and partner is to be detailed between the three parties. The Saudi-French-Chinese enterprise (dubbed "Horse" by Renault and "Rubik" by Geely) should develop higher-efficiency fossil fuel power plants and hybrid systems drivetrains.

Sources close to the Aramco-Renault-Geely deal told Reuters that the Saudi's involvement is to aid the gasoline engines' decarbonization. At the same time, the Arabian company will back research and development of synthetic fuel solutions for ICEs and, somewhat counterintuitively, hydrogen technologies.

Aramco is already working with the Koreans of Hyundai to create high-efficiency, low-emissions hybrid engine fuels. The three-way partnership between the oil producer and the two car companies comes at an automotive industry peak in electrification efforts.

However, in what would appear as a safety net for the full-electric endeavor, Renault and Geely joined hands last year to give the ICE a new chance. According to their claims, the venture would rely on 17 manufacturing plants for powertrains. Additionally, three research and development centers would be incorporated into their new deal, bringing the 20 facilities to 19,000 employees.

On the one hand, the Chinese-French-Saudi venture would make sense, as hybrid powertrains are still a primary focus for carmakers. Albeit in a somewhat different paradigm than the present mainstream systems, where engines drive cars directly.

According to one of the sources of the news agency's report, the new entity would develop four-cylinder generators rather than conventional car engines. This means that the powerplant will only power a hybrid car battery and not directly apply mechanical force to the transmission.

One of the Reuters sources indicated that the efficiency of such onboard generators is claimed to be much higher than a typical ICE's.

The Arab-Sino-French enterprise is still very early in the making, with the three companies currently working on a letter of intent. Once the document is finalized, the automakers' boards have to approve the deal, states Reuters, citing sources within the three companies.

Although the trend for electric-only automobiles is exponentially increasing its rate of development, traditional fossil-fuel-based powertrain solutions still garner attention from the auto industry. The world's largest car manufacturer, Toyota, is still promoting hybrid systems, invoking electric cars' high prices and underdeveloped charging networks.