Saudi Arabian oil giant is in advanced talks to invest in newly established Horse Project ICE division.
Saudi Arabian oil giant Aramco is poised to take a significant stake in the new ICE-powertrain technology company formed by Renault and Geely.
As reported by Reuters, state-owned Aramco – holder of the world’s second-largest crude oil reserves and currently the world’s third most valuable company – is in advanced talks with the two car makers concerning an investment in their newly established Horse Project division.
Announced late last year, the Horse Project (not believed to be the outfit’s final name) has been established as a standalone entity to allow Renault and Geely to share the development of new combustion and hybrid powertrains.
Early projections pointed to an initial annual turnover of £13 billion (AUD$22.85 billion) and a yearly output of five million powertrains to eight existing customers, including Nissan and Volvo.
The Horse Project encompasses some 17 plants worldwide, employs 19,000 staff and supplies systems to 130 countries worldwide.
Its primary aim is to cater to sustained global demand for petrol and diesel-powered vehicles as the wider Renault and Geely groups work to electrify their model ranges.
The Renault Group has previously pointed to a predicted annual growth rate of 2 per cent in the ICE and hybrid segments until 2030, with markets such as Latin America, India, South Kora and North Africa still favouring ICE vehicles.
Reuters‘ sources claim the development of a new four-cylinder engine is among the early priorities for the Horse Project, and the company is said to be investigating the use of ICEs to generate charge for an electrical drive system in a new-generation hybrid powertrain.
It’s not yet clear how much Aramco could invest in the outfit, but Reuters cites three people with knowledge of the discussions as saying the Saudi firm could acquire a shareholding of up to 20 per cent, leaving Renault and Geely with 40 per cent apiece.
Aramco would also serve as a development partner as Renault and Geely work towards launching new-generation ICE powertrains with improved efficiency.
Reuters has seen a document prepared by the three companies that suggests Aramco’s involvement would extend to shared research of synthetic-fuel solutions and hydrogen technologies.
A deal is still subject to board approval, but a letter of intent could reportedly be completed in “the coming weeks”.
Renault has declined to comment on the latest reports.
News of Aramco’s interest in Renault and Geely’s activities comes shortly after it was revealed that Renault-owned performance-car brand Alpine was seeking an external investor for its Formula 1 team, which would support its ambitious global road car plans.
Geely’s ownership of Lotus could pave the way for Alpine and the British company (which are already sharing development of an electric sports car) to strike a deal in line with their shared plan to form “a collaboration to leverage Alpine’s motorsport platform covering Formula 1 to endurance”.