Last November, Renault announced that it was breaking with everything. Metaphorically speaking. But the truth is that, one way or another, yes, Renault will be made up of five pillars in the coming years. Five marks to support the signature of the rhombus.
The company, led by Luca de Meo, confirmed that in its restructuring it will take a path similar to the one Ford had already announced, but with some particularities: instead of two companies, Renault would give life to five. With the specialization of each of its parts, the French hope to achieve the best possible result.
Ampere for its electric vehicles and software development, Alpine as an independent brand, Mobilize dedicated to the new mobility in cities (carsharing, VTC…) and The Future is Neutral, focused on the circular economy and the search for new materials sustainable for use in vehicles.
And also Power. The line dedicated exclusively to vehicles with combustion engines, both pure and hybrid of all kinds. An umbrella under which we find the vehicles of Renault and Dacia itself. To promote this line of business: Horse Project.
What is Horse Project and what does Renault expect
The European Union bans on the sale of new vehicles with combustion engines (including plug-in hybrids) from 2035 and the future arrival of a restrictive Euro VII standard have discouraged some manufacturers, who have already announced that they have stopped invest money in development combustion mechanics.
Some movements with which Renault has been critical from the beginning. Luca de Meo is the new visible head of ACEA and in his welcome speech he already pointed out that the path that Europe is taking is the wrong one. Renault itself has stated that it is open to changes that make it possible to sell hybrid mechanics beyond 2035.
It is not surprising, therefore, that Renault has made a living to create Horse Project, a company dedicated exclusively to the production of combustion engines and the development of more sustainable options. A movement that has ended up deriving into a major disagreement with Nissanthe other great bastion of the alliance that they share with Mitsubishi.
The new structure of Renault
The reason is that Renault will not be alone in front of this company. The French are aware that the development of combustion engines is something that will become more expensive in the future. The sales market is reduced if Europe cannot sell them and it is expected that the electric car will gain ground in other markets where no restrictive measures have been announced, such as the United States.
Despite everything, Renault is confident that these engines will continue to be in demand sufficiently important to make the project viable. Despite everything, they have needed the Geely investment, which will participate in it with 50%. Thus, Renault and the owners of firms such as Volvo or Polestar will bear half the potential benefits and risks of Horse Power.
Renault and Geely will share risks and benefits with Horse Power
This second part, that of the investment with the Chinese conglomerate, is what has caused Nissan’s reluctance. In fact, Horse Project will be able to supply combustion engines to Nissan vehicles but we will not find original Nissan propellants in this new firm.
The goal, plain and simple, is reduce risks. Renault already announced that they would go electric in 2030 and Geely counts Polestar (exclusively electric) and Volvo (which also confirmed that they will go purely electric in 2030) among its most powerful brands. Until then, their vehicles in Europe will continue to receive new engines and, supposedly, more efficient than the competition, as they will maintain their investments.
But, in addition, from the outset, Renault and Geely have positioned themselves in favor of selling these combustion engines to third parties, opening a huge door to the production of engines for markets where they are not prohibited.
With the advantage that Renault and Geely are probably going reducing the size of the company little by little to go adapting to new demands From the market. If in the future (mass entry of electric companies, prohibitive fuel prices…), the risk will have been minimal. If the European Union backs down, they will be in an enviable position.
