The two companies will also invest $7.7 billion to produce up to five million internal combustion, hybrid and plug-in hybrid engines and transmissions.
In addition, the joint venture aims to establish both companies as leaders in the development of next-generation hybrid powertrains
“Powertrain” refers to all mechanisms, including the engine, that enable a vehicle to move.
“This investment is expected to be completed before the end of the year,” Renault said, adding that Saudi Aramco is also considering investing in the joint venture.
In this case, Saudi Aramco will help fund research on synthetic fuels and hydrogen, both of which are critical to decarbonizing the automotive sector, including internal combustion engine cars.
Earlier this year, Reuters, citing three sources familiar with the matter, reported that Saudi Aramco was in advanced talks with Renault and Geely to take a 20 percent stake in the joint venture.
Record sales of electric vehicles in China
Renault's partnership with Geely, China's largest privately owned automaker, will deepen its access to the world's largest electric vehicle (EV) market.
According to the China Passenger Car Association, EV sales in China skyrocketed in the second quarter of 2023, hitting a record high last month, buoyed by price cuts by automakers and subsidies from the local government.
Other vehicles seeing increasing sales include battery-powered plug-in hybrid engines and fuel cell engines.