Following the framework agreement announced in November 2022, Geely and Renault have signed a binding joint venture (JV) agreement to launch a new hybrid and ICE powertrain technology company to be run jointly by both automakers.

The Financial Times said: “Geely, via its subsidiary Aurobay Holding, will hold a third of the joint venture. Half goes to Renault and the remaining stake to Geely Holding subsidiary GHPT.”

Saudi Aramco is considering investing in the new company. The company signed a letter of intent with Renault and Geely to become a potential minority stakeholder last March.

The initial organisation will operate in Madrid for Renault and Hangzhou Bay for Geely.

Renault and Geely said: “An executive team will be based in the headquarters of the new company, which is intended to be established in the UK, to consolidate operations, build on synergy, and define future plans.”

The two companies will transfer intellectual property (IP) to the operational centres so they can become fully autonomous in developing technology.

Depending on laws and regulations, Geely Auto and Renault will enter into a long-term supply agreement with the JV for ICE, hybrid and plug-in hybrid powertrains for passenger vehicles.

Renault will also obtain powertrains for LCVs and the development of hybrid batteries.