Geely, Volvo urge ICE makers to share tech

DESPITE pledging to make only pure electric vehicles by 2030, Volvo and by implication, owner Zhejiang Geely Holdings Group, are proffering advice to car-makers still planning to produce internal combustion engines in this and possibly into the next decade.

The irony of a company aiming to capitalise on sustainability to sell BEV cars telling ICE makers what to do is staggering. However, there looks to be some sense to the proposition from Volvo/Geely (VG).

VG, through their powertrain unit, Aurobay, say internal combustion engine manufacturers should consolidate their legacy businesses as electric cars take off with combustion engines set to be in demand for years to come.

As reported in publication, Automotive News Europe, (ANE): “Bundling non-electric assets would help to improve hybrid-combustion technology and add scale to save costs,” said Aurobay Powertrain Engineering Sweden CEO Michael Fleiss.

VG recently finalised their Aurobay venture, which includes two powertrain plants in Sweden and China, with plans to win outside customers, says ANE.

“The worst thing that can happen to the climate and the world, is that there’s no further development of these technologies,” said Mr Fleiss in an interview with ANE, who said that combining different assets “would absolutely make sense economically – it’s quite an expensive product.”

Car-makers are increasingly taking steps to address the balancing act between an electric-only future and legacy combustion assets. It’s crystal ball gazing at its most intense as multiple billion-dollar investments are directly implicated to say nothing of the viability of huge companies and livelihood of millions of workers.

As mentioned, Volvo Cars last year said it will stop making combustion models by 2030 and has already commenced that process with first diesel on the chopping block and soon petrol models for the rubbish bin.

Meanwhile, Ford Motor Company has embarked on a separation of its ICE and EV/software operations sacking thousands in the process as EVs are not as labour intensive as ICE vehicles. Other manufacturers are running their own agendas in the transition.

The ANE report says Renault Group is set to detail plans for a carve-out of its EV assets in November, while Mercedes-Benz Group has said it will only sell electric cars by the end of the decade, where possible whatever that means.

Aurobay is targeting to become “as big as possible, as fast as possible,” Mr Fleiss told ANE, which will require collaboration.

“Even if all these predictions and ambitions of selling BEVs come true, in 2040 as many as 75 per cent of cars on the road will still be combustion based,” he admitted.

The unit, owned two-thirds by Geely and the remainder by Volvo Cars, produced 750,000 combustion and hybrid engines as well as electric motors, at the Skovde plant in southern Sweden and the Zhangjiakou factory in Hebei province in China.

ANE says the business employs about 2900 workers and both facilities used to belong to Volvo, which has been fully owned by Geely since 2010. There is also a plan to add Geely Automobile Holdings powertrain operations to the venture at some point in the future.

Mr Fleiss, a long-standing Volvo Cars executive with previous roles at Volkswagen Group, declined to comment to ANE on whether Aurobay is holding talks with Renault on their combustion-engine business plans. However, a consolidation of such assets is something that “definitely lies ahead,” he said.

Aurobay may consider a stock market listing “in some years” but has “no active plans,” Mr Fleiss said, adding that a surprising number of interested investors are reaching out about options to buy into the company.

“These investors see there is a big business still to make, and quite some revenue to be done before this technology dies out,” he told ANE.