Volvo Car AB will sell its 33% stake in Aurobay to Geely Automobile Holdings Ltd. as part of the Swedish company’s move to become a fully electric-vehicle company in the next eight years.
During this period of transition, Aurobay will remain a strategic partner to Volvo
VOLV.B,
VOLV.A,
and the sole supplier of hybrids and mild-hybrid powertrains, Volvo said Tuesday.
“As we continue to execute on our strategy, transactions like this will be an important supplement to our investments and partnerships for the future,” Johan Ekdahl, chief financial officer for Volvo Cars, said.
The company said it will focus its investments and capital allocation on developing high-performance, fully electric powertrains.
Aurobay was formed as a stand-alone business in 2021 when Volvo Cars Powertrain Engineering Sweden–including its Skovde-based engine plant and related research-and-development team, along with its China engine plant–was carved out from Volvo Car Group.
The terms of the deal weren’t disclosed, though Volvo said proceeds will be used for expansion, including its new production line for electric motors in Skovde.
The transaction is expected to be closed before the end of this year, the company said.
In a separate statement to the Hong Kong Exchange, Geely
175,
said the company has signed a framework agreement with French automaker Renault to form a powertrain technology joint venture. Each company will hold 50% of the venture.
The new company plans to set up 17 powertrain plants and five research and development centers with around 19,000 employees, supplying 130 countries, said Renault. It is expected to supply industrial customers including Dacia, Volvo Cars, Nissan and Mitsubishi.
Write to P.R. Venkat at [email protected]
