•  Stake Acquisition and Valuation: Saudi Aramco will acquire a 10% stake in the thermal engines joint venture between French carmaker Renault and Chinese carmaker Geely. The venture, named Horse Powertrain, is valued at 7.4 billion euros.

•  Ownership and Goals: Renault and Geely will each hold around 45% of Horse Powertrain. The joint venture aims to supply petrol engines, hybrid systems, and gearboxes for thermal vehicles. Renault CEO Luca de Meo described the collaboration as creating a “dream team” to reinvent combustion engine and hybrid technologies.

•  Market Context and Strategic Importance: The investment is seen as a strategic move to stabilize investments in legacy automakers, providing a safety net amid the industry’s shift towards electric vehicles. This comes at a time when the global electric vehicle market is facing concerns over demand and rising production costs.

Saudi Aramco will acquire a 10% stake in the thermal engines joint venture between French carmaker Renault and Chinese carmaker Geely, the companies announced on Friday, valuing the business at €7.4 billion. Renault and Geely will each hold around 45% of the venture, named Horse Powertrain, which will supply petrol engines, hybrid systems, and gearboxes for thermal vehicles.

Reuters had reported on Thursday that the state-owned company was nearing the purchase of the 10% stake. Renault CEO Luca de Meo described the collaboration as creating a “dream team” aimed at reinventing the future of combustion engine and hybrid technologies.

“Aramco’s stake in the thermal engine joint venture could stabilize investments in legacy automakers, providing a safety net amid the electric shift,” noted investor platform Finimize ahead of the official announcement.

The investment comes at a time when the global electric vehicle market faces concerns over demand and rising production costs. This month, the European Commission announced additional duties of up to 38.1% on imported Chinese electric cars, effective from July.

Aramco, which recently raised approximately $11.2 billion through a secondary share sale, had initially indicated an interest in purchasing a 20% stake in Horse Powertrain. The company signed a letter of intent in March 2023, expressing its intention to potentially become a minority shareholder in the venture.