Combustion isn't finished yet! Why this massive Chinese and French joint engine venture could see new petrol-powered Nissans and Mitsubishis for years to come

A massive announcement out of Europe will see two giants, Renault and Geely, unite to create a combustion engine joint venture in the face of a fully electric wave sweeping over much of the EU.

It’s a statement from both international giants that they see combustion as a technology with a big future outside of Europe, where the powertrains will be all but outlawed by 2035.

China’s Geely - which owns Volvo, Polestar, Lotus, and a large portion of Proton, as well as significant but minor stakes in Mercedes-Benz’ Daimler parent company and even Aston Martin- will split the new engine development business 50/50 with Renault, who is in a strategic but strained alliance with both Nissan and Mitsubishi.

The company is planned to be a “standalone global supplier of propulsion system solutions” to manufacture and supply “best-in-class hybrid and highly efficient ICE powertrains”.

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The deal comes as Geely extends its tendrils into Europe, securing deals to distribute and sell cars under its Chinese trading names, not just Volvo, Polestar, or Lotus.

It also signals the end of a search by Renault for a partner to save its ailing combustion business.

The new company is expected to supply engines to Renault, Dacia, Geely, Volvo, Lynk & Co, Proton, and importantly, Nissan and Mitsubishi. Renault claims it could even “offer powertrain technologies to third-party car brands” outside of either the Renault-Nissan-Mitsubishi alliance, or the companies owned by Geely Holding Group.

Geely's Boyue SUV for the Chinese domestic market already sits on Volvo's CMA modular architecture

Worth noting is the fact that some Renault powertrains are already shared with Mercedes-Benz and Nissan products, such as the 1.3-litre four-cylinder turbocharged engine referred to as the H5Ht engine by Renault, and used in the Captur, Clio and Megane, as well as the Mercedes-Benz A-Class and GLA (where it is called the M282), and even the Nissan Qashqai (Nissan calls it the HR13DDT).

The massive joint-venture deal is wide-reaching, expected to include 17 powertrain plants, five R&D centres in three continents, with 19,000 employees. Its scale is to build five million engines and hybrid systems a year. While a final agreement is yet to be reached on the venture, the new company is expected to launch in 2023, based out of London.

The new powertrain division could even supply Mercedes-Benz if existing partnerships stay in place.

Renault and Geely already have a joint-venture for the South Korean market called Renault Korea Motors, previously known as Renault Samsung Motors. This venture will build cars on Volvo’s CMA architecture beginning in 2024.

Interestingly Volvo has divested itself from its own combustion unit in Sweden, allowing Geely to take full control. Volvo has said it will be fully electric globally by 2030, and specifically in Australia by 2026 as the only brand thus far which expects it will go electric early Down Under.

Geely will launch in Europe with its fully electric Geometry division securing a supplier for a launch in 2023. The Chinese Giant already operates its Lynk & Co division in Europe, and plans to bring Lynk & Co’s fully electric and high-performance Zeekr spin-off brand to the continent later in 2023.

Geely is making moves in Europe with a deal to distribute its range of Geometry-branded fully electric cars.

Its electric commercial division, Farizon, is also eying a European debut in 2024. It plans to launch with a van to take the fight to Ford’s e-Transit.

Geely has global ambitions, and this includes Australia, with the brand planning to launch its Lynk & Co division by 2025.