The UK government has proclaimed its commitment to reach net zero emissions by 2050. This action plan has been met with mixed reactions from the nation: will it be the key to saving our environmental future, or is it just another overly ambitious plan doomed from the start?
Regardless of personal opinions, investment in green technology is at full speed ahead around the globe. Now, a new company launched by motor makers Renault and Geely which will be committed to the development of low-carbon technology is set to have its headquarters in the UK, the BBC reports.
The company will invest in low-emission petrol, diesel and hybrid engines. Not only will this meet the ever-increasing global demand for electric vehicles, but could it also help to prop up a government promise of a net zero emissions future?
The Renault-Geely Deal
A joint venture agreement between French motor giant Renault and Chinese carmaker Geely will result in a new global company set to be headquartered in the UK, with each entity holding a 50% stake in the new company.
The firm will be launched later this year and plans to invest up to £6bn to develop low-emission petrol, diesel and hybrid engines. These will be supplied to multiple car makers worldwide, including Nissan, Volvo and Mitsubishi.
It will employ around 19,000 workers at its 17 engine factories, in addition to 5 research and development hubs. The venture aims to have an annual production capacity of up to 5m internal combustion, hybrid and plug-in hybrid engines and transmissions per year.
Renault and Geely have released a statement that the new company will use its UK headquarters to “consolidate operations, build on synergies, and define future plans.”
The partnership comes after Hangzhou-headquartered Geely has spent the last few years investing in making electric vehicles (EVs). A decade ago, it bought Coventry-based London black cab manufacturer London Taxi Company in a deal worth £11.4m.
In 2017, the cab maker was renamed the London Electric Vehicle Company to highlight its focus to switch to EV tech. It developed the city’s first electric black cab, with around 5,000 of the vehicles now on the capital’s streets.
Geely’s new joint venture with Renault will be its latest step in becoming the leader in next-generation hybrid solutions to meet worldwide demand for the years to come.
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A Shift In The Global Motor Industry
The deal between Renault and Geely comes as the global motor industry is shifting its focus to developing electric vehicles.
Although the firm is not exclusively committed to developing electric engines, chief executive of Renault Luca de Meo says he hopes that joining forces with Geely will “disrupt the game and open the way for ultra low-emissions ICE (internal combustion engine) technologies”.
In turn, Geely Holding Group chairman Eric Li added that this step will accelerate its plans to “become a global leader in hybrid technologies, providing low-emission solutions for automakers around the world.”
The deal between Geely and Renault demonstrates a shift in the motor industry to becoming more carbon-friendly. Other global companies have already taken an interest in the example this partnership is setting.
The firms say that energy giant Aramco – the world’s biggest oil and gas company – may join the venture and that it is “evaluating a strategic investment”.
Aramco is a significant emitter of greenhouse gases – a key contributor to global climate change. The company’s interest in joining the Renault-Geely venture comes after its president and chief executive Amin Nasser said earlier this year that it would increase its investments in lower-carbon technologies.
Aramco’s sentiments in becoming focused on a carbon-friendly future are echoed in the statement of Mr Meo, who stated that “When it comes about the global race for decarbonizing road transports, there is no time to lose, and it will not be business as usual.”
“Facing today’s automotive challenges, no one can claim to have all the solutions, alone. Coming up with breakthrough innovations requires combining expertise and assets.” “I want to thank Eric Li Shufu for his trust: we are now ready to move forward!”, he finished.
Despite the typical new EV being more expensive than its equivalent petrol or diesel car, the demand for them is continuing to grow in countries around the world, including the UK. Not only may the Renault-Geely deal help to quell this demand, but it echoes the strategy set forward by the UK government which promises an investment of up to £1bn to support the electrification of UK vehicles.