Soon Renaults with Chinese engines and Saudi fuel?

Common-sense partner of the Chinese giant Geely, Renault signs a major new strategic alliance with Aramco.

Aramco, one of the world leaders in energy and chemistry, has just acquired a 10% stake in HORSE Powertrain Limited, the new global player in powertrain development created by Renault and Geely last May. Aramco will initially hold a 10% stake from Renault and Geely, who remain majority shareholders with 45% of the capital each. Based on Aramco’s investment amount, the company’s valuation can be estimated at 7.4 billion euros.

But what is a Saudi oil producer doing in a company dedicated to creating solutions for tomorrow’s decarbonized mobility? Aramco has no choice but to participate in the global energy transition, no matter the cost. Oil is by nature a non-renewable energy source, and it is better to anticipate the coming decades by being an active player in the development and commercialization of more sustainable mobility solutions.

The agreements primarily grant Aramco and Valvoline control over the technologies, fuels, and lubricants aimed at improving the performance of HORSE’s internal combustion engines (ICE), ensuring the initial supply for all the vehicles produced. However, the decarbonization of the automotive industry will require a combination of various technologies, including alternative fuels such as low-carbon synthetic fuels and hydrogen. These are the sectors where Aramco is planning its future and has already proven its capabilities.

This idyllic picture might suggest that Aramco is merely a technical partner. That would underestimate the ambitions of the Saudi group, which originally aimed for a stake of over 20% but had to lower its ambitions to gain its entry ticket into the alliance. Let’s be certain that this will only be temporary…

ALSO READ: Geely-Renault, a Trojan horse that will kill the European automobile industry?