In a strategic move, Saudi Aramco is poised to secure a 10% stake in the thermal engine joint venture between Renault and China’s Geely, known as Horse Powertrain. Here’s a comprehensive overview of this significant development:
The collaboration between Saudi Aramco, Renault, and Geely aims to strengthen the legacy automotive industry by supplying essential components for traditional combustion engines. Let’s delve into the details:
The Horse Powertrain Venture:
Vision and Purpose:
- Horse Powertrain specializes in providing gasoline engines, hybrid systems, and gearboxes for thermal vehicles.
- The joint venture seeks to address the evolving automotive landscape while supporting existing gasoline-powered vehicles.
Key Points:
- Aramco’s Investment:
- Saudi Aramco’s decision to acquire a 10% stake underscores its commitment to diversifying its portfolio beyond oil.
- The investment aligns with Aramco’s vision for sustainable growth and technological innovation.
- Renault and Geely Partnership:
- Renault and Geely jointly established Horse Powertrain, recognizing the need to enhance combustion engine technology.
- The venture combines European expertise (Renault) with Chinese automotive prowess (Geely).
Industry Impact:
Strategic Implications:
- Aramco’s involvement in Horse Powertrain signifies a strategic shift toward future-proofing the energy sector.
- By supporting traditional engines, the venture contributes to stability in markets where electric vehicles are still gaining traction.
Market Valuation:
- The transaction values Horse Powertrain at approximately 7.4 billion euros ($7.92 billion).
- Aramco’s investment reflects confidence in the venture’s long-term prospects.
