Aramco to Buy 10% Stake in Renault-Geely Thermal Engines Venture

Saudi Aramco logo is pictured at the oil facility in Abqaiq, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov/File Photo Purchase Licensing Rights

Geely (0175.HK), opens new tab and Renault (RENA.PA), opens new tab will own around 45% each of the powertrain venture, called Horse Powertrain, which will supply gasoline engines, hybrid systems and gearboxes for thermal vehicles.

Reuters reported on Thursday that the state-owned company was close to buying a 10% stake in the venture.

Renault CEO Luca de Meo described the deal in a statement as creating a "dream team" that would "reinvent" the future of combustion-engine and hybrid technologies.

"Aramco's stake in the thermal engine joint venture could stabilize investments in legacy automakers, providing a safety net amidst the electric shift," investor platform Finimize wrote, ahead of the official announcement.

The investment comes as the global electric-vehicle market struggles with worries around demand and rising production expenses.

The European Commission this month said it would impose extra duties of up to 38.1% on imported Chinese electric cars from July.

Aramco, which this month raised around $11.2 billion through a secondary share sale, had originally signalled it would buy a 20% stake in Horse Powertrain.

The company signed a letter of intent in March 2023 with a view to possibly becoming a minority shareholder in the venture.