Volvo and Geely plan to merge their ICE and hybrid motor production

Volvo and Geely plan to merge their ICE and hybrid motor production

Swedish automaker Volvo and its Chinese parent company Geely Group have plans underway to set up a new independent company, for merging their efforts in developing and producing internal combustion engines (ICE) and hybrid drives.

According to the information released by Volvo and Geely, the details for the new independent unit are presently being negotiated by the two companies. The move is also conditional to the approval by the Board of Directors as well as the relevant authorities.

However, it is apparent that both Volvo and Geely companies are looking to achieve cost savings by combining the development and production of ICEs and hybrid drives into a new independent unit. As a result of the move, Volvo and Geely will be able to increasingly focus on the development of an all-electric vehicle lineup.

The new independent company to be formed by Volvo and Geely will imply that, in future, the ICEs and hybrid drives for all Geely Group brands -- including Geely Auto, Volvo Cars, Lynk & Co., Proton, Lotus and LEVC -- will be supplied from one single source. This may also include the supplies of third-party manufacturers.

In reference to the plans by Volvo and Geely to set up a new independent unit to merge their ICE and hybrid motors, Volvo President and CEO Håkan Samuelsson said that “Hybrid cars need the best internal combustion engines.” He also added that the “new unit will have the resources, scale and expertise to develop these powertrains cost-efficiently.”