Renault starts operations at Horse combustion-engine unit

PARIS — Renault Group’s side of the planned Horse internal-combustion JV with Geely and Aramco has begun operations, with 9,000 employees, eight manufacturing sites and three research centers.

Horse was announced in November 2022 by Renault CEO Luca de Meo in November 2022, with Zhejiant Geely Holding Group as an initial 50-50 partner through the Chinese company’s Aurobay engine unit. Aramco, the Saudi national energy company, signed a letter of intent in March to join.

As part of a sweeping reorganization announced by de Meo, Renault’s EV activities will be concentrated in France in a separate company called Ampere that is expected to go public in the first half of 2024. At the same time, Horse’s activities will be outside of France, in lower-wage countries such as Argentina, Romania, Spain and Turkey.

Other automakers are also weighing how to manage their internal-combustion businesses as EVs gain market share. Electric vehicles have fewer moving parts and require fewer workers to build, raising concerns about mass layoffs in the coming decades.

Horse is based in Madrid and led by CEO Patrice Haettel, Renault said Thursday in a news release. Haettel, a veteran Renault production executive, said that Horse will still have a large addressable market in 2040, when 50 percent of all car sales will still have an internal-combustion engine.

The new entity including Geely’s participation will be created “in the coming weeks,” Renault said. As for Aramco, the news release said it is “evaluating a strategic investment” to support the growth of the company and research into synthetic fuels and hydrogen.

Initially, Renault’s engine and transmission factories will supply cars from Renault, Dacia, Nissan and Mitsubishi, with potential third-party sales in the future. Components include engines, transmissions and hybrid systems, as well as those adopted for alternative fuels such as e-fuels, hydrogen, ethanol and LPG.

Renault Group factories alone are expected to produce 3.2 million drivetrains a year; with Geely’s participation at its plants in Sweden and China that figure would rise to 5 million. 

Aurobay supplies powertrains for brands including Volvo, Lynk &CO, Proton and Geely’s namesake brand.

Revenue will be 15 billion euros a year, Horse said on its new website, horse.cars. The final entity will have a total of 19,000 workers at 17 plants and five R&D centers.

The partnership with Aramco will be focused on synthetic fuels, which received an exemption from the EU from 2035 rules that mandate all new cars must be zero emission. 

Although the final rules have not been released, automakers such as Porsche and Ferrari could continue to build internal-combustion engines for their sports cars, and de Meo has said they could be a good fit for the low-cost Dacia brand, which will go full-electric “as late as possible” to keep its cars affordable.