Headlines
Horse power: Renault-Geely engine unit speeds up as EV shift stutters
Published by Global Banking and Finance Review
Posted on October 16, 2025
5 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 16, 2025
5 min readLast updated: January 21, 2026
Renault-Geely's Horse Powertrain adapts to slow EV transition, aiming to lead in combustion engines by 2035.
By Gilles Guillaume and Marie Mannes
MUNICH/STOCKHOLM (Reuters) -When French carmaker Renault and China's Geely carved out their combustion-engine operations in 2022, the venture looked like a footnote to an outdated technology. Now, Horse Powertrain has a new lease of life.
The joint venture aims to become the world's top engine maker by 2035, betting that legacy carmakers pivoting to EVs will still need suppliers to make combustion engines for them as the energy transition stutters.
U.S. President Donald Trump is rolling back EV-friendly policies, Europe's automakers are lobbying against the EU's 2035 ban on new fossil-fuel cars, and EV sales are crawling forward in emerging markets.
Pitching itself as a one-stop shop for automakers, producing everything from hybrid engines to the small combustion units that extend range in plug-in EVs, Horse is targeting annual revenue of 15 billion euros ($17 billion) by 2029, up 80% from 2024, according to a Reuters analysis.
"Automakers cannot do it all," CEO Matias Giannini told Reuters. "We've got to help them."
Sceptics say that when the EV transition hits a tipping point, the switch will come quickly - a longer-term risk.
"Betting big on legacy engine technology now is like Kodak backing film in the digital age," said Ginny Buckley, CEO of EV buying and advice website Electrifying.com. "It might work for a while, but the clock is ticking."
'THE INTERNAL COMBUSTION ENGINE IS NOT DEAD'
Figures from before the Horse JV was finalised at the end of 2024 are unavailable, but a Reuters analysis found the separate units had combined sales of 8.3 billion euros last year.
Giannini says Horse is currently the world's No. 3 engine maker, with 17 engine and transmission factories previously run by Renault, Geely Holding and Geely-unit Volvo Cars, including eight in China.
Horse's opportunity reflects the changed dynamics in the global auto sector.
Carmakers including Porsche, Ferrari, Stellantis and Ford have slowed the shift to EVs, even while low-cost firms boom in China, meaning fossil-fuel cars will keep selling well into the 2040s.
"The internal combustion engine is not dead," said Pierre Loret, vehicle powertrain analyst at S&P Global.
AUTOMAKERS CAN'T MAKE 'TOO MANY BETS'
EVs are still seen as the future: EVs and plug-in hybrids account for 47% of Chinese new car sales this year and EV sales are up 25% in Europe.
That leaves automakers with a tough choice: invest in EVs, fossil-fuel models and hybrids at the same time, or outsource some of them.
"If you bet on every number in roulette, you're going to win," said Bill Russo, CEO of Shanghai-based consultancy Automobility. "But you won't make any money because you've made too many bets."
Horse can lean on European legacy expertise and Chinese scale to cut automakers' costs, Russo added.
Horse's Giannini expects 50% of new cars to be EVs in 2040. Others predict more. But even then, tens of millions of new hybrid cars will still need engines.
"Let automakers concentrate on their transition to EVs ... while we support them with highly efficient hybrid engines and transmissions," Giannini said.
Renault expects to save 2 billion euros in engine development by 2030 via outsourcing to Horse, and Giannini is pitching those savings to new customers.
Horse currently produces over eight million engines and transmissions annually for more than 15 automakers including Renault, Dacia, Volvo Cars, Nissan, Mitsubishi and Mercedes-Benz.
According to a source close to the matter, Horse is pursuing about 100 projects across all its products and markets - from cars to boats, construction equipment and drones.
Horse, Geely and Renault declined to comment.
Geely and Renault own 45% of Horse each. Oil producer Saudi Aramco owns the remaining 10%.
Phil Dunne, a managing director at consultancy Grant Thornton Stax, said Horse would not work for automakers like Ferrari that need their own specialised engines.
"But for mainstream solutions, it's ideal."
A RISKY BET OR A WINNING ONE?
Geely founder Li Shufu has poured billions into EVs at Lotus, Polestar and Volvo Cars, but they have mostly struggled, making Horse look like his best bet so far.
"They (Geely) are willing to take risky bets but at the same time they do things like Horse," Automobility's Russo said. "When they don't work, they reconfigure."
Horse itself is betting on new technologies, including plug-in hybrids (PHEVs). It has also launched a suitcase-sized combustion engine for extended-range electric vehicles (EREVs) - which use a small engine to boost an EV's range.
Sam Fiorani, vice president at research firm AutoForecast Solutions, said there are about 30 EREV models on sale in China, rising to about 45 in 2030. He also forecast a dozen U.S. models selling about 200,000 units in 2030 "from virtually zero today".
But Lucien Mathieu, cars director at European environmental group Transport & Environment, said the focus should be on accelerating the switch to EVs.
"It would be reckless... to embrace Horse as that would mean continuing to bet on outdated technologies while the world is going electric," Mathieu said.
($1 = 0.8608 euros)
(Reporting by Gilles Guillaume in Munich, Marie Mannes in Stockholm. Editing by Nick Carey and Mark Potter)
A joint venture is a business arrangement where two or more parties agree to pool their resources for a specific project or business activity, sharing risks and profits.
An internal combustion engine is an engine that generates power by burning fuel within a combustion chamber, converting the energy from fuel into mechanical work.
Electric vehicles (EVs) are cars that are powered by electric motors instead of internal combustion engines, using batteries to store energy.
Market dynamics refer to the forces that impact the supply and demand of goods and services in a market, influencing pricing and competition.
Sustainable development is a method of using resources that meets current needs without compromising the ability of future generations to meet their own needs.
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