The Swedish Volvo Cars and its Chinese owner, Geely have announced a plan to combine their electric cars R&D and engine operations. The aim is also that the new unit will offer the services to other customers in the future. The change is part of the Volvo Car´s focus in electrification of its whole production.
This means that the companies intend to merge their existing combustion engine operations into a stand-alone business that will seek to develop next generation combustion engines and hybrid powertrains.
– The proposed new business would clear the way for Volvo Cars to focus on the development of its all-electric range of premium cars. Volvo Cars is building an entirely electrified product range, as part of the company’s ambition to put sustainability at the core of its operations. By the middle of the next decade it expects half its global sales to be fully electric and the other half hybrid, supplied by the new unit, Volvo said in its press release.
– For Geely, the planned new entity means technologically-advanced and efficient combustion engines and hybrid powertrains would be available to Geely Auto, Proton, Lotus, LEVC and LYNK & CO. The planned new stand-alone business can also supply third party manufacturers, providing possible growth opportunities, companies say.
The new entity will have 3000 employees from Volvo Cars and around 5000 employees from Geely´s combustion engine operations.
Volvo Cars believes the electrification of the automotive industry will be a gradual process, meaning there will be significant ongoing demand for efficient hybrid powertrains alongside fully-electric offerings.
-Hybrid cars need the best internal combustion engines. This new unit will have the resources, scale and expertise to develop these powertrains cost efficiently, said Håkan Samuelsson, Volvo Cars’ president and chief executive.
The detailed plans of the new business are under development and subject to union negotiations as well as board and relevant authority approvals, companies say.
Volvo Cars is about to launch its first fully electric XC40 in October 16th. Later in October Volvo will also publish its Q3 report.
Picture: The new Volvo XC60 T8 R-Design in Crystal White