News - Volvo
Geely forms new ICE business with Volvo
Volvo commits to EVs but creates subsidiary with Geely to make combustion engines
20 Jul 2021
By NEIL DOWLING
VOLVO has made no secret that it will pull out of making internal combustion engines and moving the brand to 100 per cent electric by 2030, but that doesn’t mean it won’t still have a finger in the petrol tank.
With Geely Automobile Holding, Volvo has created a separate company that will continue internal combustion engine (ICE) development. All ICE operations, including the factories, will transfer to the new business called Aurobay. Volvo and Geely Automobile are both owned by China’s Zhejiang Geely Holding Group.
These ICE operations include Volvo’s wholly owned subsidiary Powertrain Engineering Sweden, its Swedish engine-maker Skövde and its R&D team, plus its engine plant in China.
Volvo will transfer 3000 employees and Geely will contribute 5000 people to Aurobay.
Geely said the move would free up resources for its push into EVs, including electric motor production now slated for Sweden and China.
This is the second EV manufacturing announcement made by Geely within a week.
Volvo is aiming for 50 per cent of its global sales volume to consist of EVs by 2025 while 50 per cent will be hybrids, with powertrains supplied by Aurobay.
By 2030, it plans that every car badged Volvo will be pure electric.
Aurobay will now develop next-generation ICEs, including hybrid powertrains, and transmissions.
These will be sold back to Volvo and Geely and – potentially – other brands within Geely including Proton and Lotus.
In addition, the ICEs will also be made available to other vehicle manufacturers.
This type of technology transfer is not new for Volvo and Geely. The Swedish manufacturer announced in March that it would work with an in-car tech company called Ecarx, part-owned by Geely, for infotainment systems to be installed in its cars.
Volvo said in a statement that Aurobay would “create a strong base for substantial operational, industrial and financial synergies”.
“The new stand-alone business also has the ambition to supply customers outside of the Geely Holding Group and aims to be a leading player in the supply of high-quality, low-emission, cost-efficient powertrains solutions.”
Geely Automobile followed up the Aurobay announcement late last week by announcing a joint-venture with its parent Zhejiang Geely to make EVs and launch a new brand called Zeekr.
Geely Automobile said the venture will work on research and development, purchase and sale of smart electric vehicles under the China-only Zeekr brand.
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