The rise of Renault-Geely's thermal engines as the transition to electric encounters obstacles

The new thermal engines from Renault and Geely for 2026

Renault and Geely, through their joint venture Horse, are set to revolutionize the thermal engine market by planning to produce up to 5 million units per year by 2026. The stakes are high, as this initiative comes at a time when electric vehicles are stagnating due to technological and economic challenges. Indeed, tensions on production infrastructures and the supply of electronic components complicate the total transition to electric vehicles. As a result, the thermal engine still has a bright future ahead.

The models planned by this alliance stand out due to their innovation. These engines would integrate significant improvements in energy performance and emissions reduction, thereby complying with the Euro 7 standards imposed by the European Union. Renault and Geely's desire to maintain the viability of thermal engines is manifested by a commitment to technological updates rather than just mass production for a declining demand.

It is interesting to note that this initiative aims to alleviate the fears of consumers still attached to combustion engines. The collective perception, often tinted with apprehension towards electric vehicles, shows a preference for the familiarity of thermal engines. In this regard, the partnership with Geely allows Renault to capitalize on foreign expertise while benefiting from a wider distribution network in the Asian market.

Impact on Renault's business strategy

The separation of Renault's activities into two distinct branches – Ampère for electric and Horse for thermal – is a cautious but necessary strategic approach. This allows Renault to position itself in both market segments. This dual strategy is particularly relevant in a context where the automotive industry is undergoing significant changes, both technologically and in consumer expectations.

This transition to hybrid models also reflects the pragmatism of automotive players. Indeed, the market is increasingly polarizing between those who embrace electric and those who remain loyal to more traditional solutions. By combining its strengths with Geely, Renault seeks to appeal to a diverse clientele, ranging from ardent supporters of electric vehicles to fans of classic mechanics. Such flexibility is essential for increasing its market share against competitors such as Peugeot and Citroën, who are also heavily investing in new technologies.

The table below shows the main players in today's automotive market and their ongoing developments:

This panorama clearly shows an increasing competition in the automotive sector, where the need to innovate beyond simple electric motorizations becomes crucial. Consumers expect performance, ecology, but above all, conviction in the choices of brands.

The challenges of the transition to electric

The road to a fully electric vehicle is fraught with obstacles. Although many countries have set deadlines for phasing out thermal engines, the reality is that existing infrastructures are not yet ready. Concerns regarding battery capacity, charging times, and the availability of raw materials such as lithium and cobalt are significant obstacles.

Furthermore, consumers face rising prices for electric vehicles, often influenced by the increasing production costs of electronic components. This phenomenon impacts decision-making, causing many drivers to hesitate to make the switch. Thus, the transition remains slow, and companies like Renault and Geely are taking matters into their own hands to address these uncertainties.

The timing of innovations

Innovations in thermal engines seem paradoxically more advantageous in the short term. This may explain why Renault and Geely are investing heavily in this technology, choosing not to rapidly divest from thermal engines. The thermal engine could benefit from best practices in the sector to integrate hybrid systems that combine efficiency and environmental respect.

The lifecycle of the modern automobile reflects on the past, the present, but especially the future. Programs like those of TotalEnergies and Shell focused on energy transition reinforce the dual-choice strategies of manufacturers. This picture of the automotive ecosystem also shows the importance of support along the way from energy sector giants.

Here is a list of the major challenges faced by new purchasing behaviors:

• The complexity of the charging infrastructure
• The rising cost of electric vehicles
• The uncertainty regarding the supply of next-generation batteries
• Concerns about vehicle performance in real-world conditions
• The persistence of preferences for thermal engines among some consumers

These factors make the transition to electric alternatives less appealing for many. As a result, brands like Renault are presenting a range of thermal engines, although these are often perceived as "relics" of the current automotive industry.

Strategic collaborations and their implications

Renault's decision to partner with Geely represents a significant evolution in how automotive companies can come together to leverage their respective strengths. These alliances transcend geographical and technological boundaries, creating a dynamic that allows for accelerated development and innovation. Indeed, the openness to external collaborators seems to become essential to face global challenges.

The creation of Horse Powertrain is a perfect example where unity brings strength. This collaborative model not only allows for sharing technical expertise but also extends production capabilities without overloading existing infrastructures. The benefits will be multiple: cost reduction, better resource allocation, and above all, a shared approach to technological innovation.

The stakes of sector transformation

Globally, the automotive enterprise is transforming. Companies like Bosch and Valeo, leading players in automotive equipment, must also adapt their offerings in light of these collaborations. Their ability to innovate through strategic partnerships will determine their place in the market. For example, Valeo has already invested in technological solutions that integrate thermal and electric, which could inspire other players to turn towards similar models.

The challenges are real for collaborators. The need for effective resource management, the implementation of ongoing research and innovation, and, above all, the necessity to maintain the unique identity of each brand in an increasingly integrated society. Here are some questions worth considering:

• How to maintain corporate culture while integrating new working methods?
• How will customers react to these changes in product lines?
• Do innovations truly arise from simple collaboration or competition?
• How to balance investments between thermal and electric?

Renault and Geely must navigate these complex questions while advancing in their approach. The balance between innovation and tradition could become their main challenge in the coming years.

The future of thermal engines in the automotive industry

The joint venture Horse, born from an alliance between Renault and Geely, is not merely a response to current challenges but also a vision for a future where the thermal engine could still find its place. Forecasts suggest that this technology could see a new lease of life, particularly in emerging markets where electric infrastructure is still in its infancy.

This renewal of the thermal engine should not, however, lead to a weakening of the commitment to more sustainable vehicles. In this regard, compliance with environmental standards and the reduction of carbon emissions remain challenges to be met by all manufacturers, whether engaged in thermal or electric. This will have a direct impact on the reputation and attractiveness of brands in the face of consumers increasingly concerned about the environment.

A double-edged strategy

This move towards a renewal of thermal engines could nevertheless elicit criticism. For some, these choices may seem regressive or insistent, while the transition to electricity is often perceived as imperative. Through its partnerships, Renault positions itself at a crossroads. Many consumers wonder whether this strategy risks diluting brand identity, especially in the face of competitors like PSA, who are making radically different decisions.

The tableau of strategic choices among automotive manufacturers raises a crucial question: on the side of the players, who will make the right choice to anticipate market changes? Only bold initiatives, like those taken by Renault, can lead to a genuine understanding of consumer needs in a future that no one can yet truly grasp.

Ultimately, the approach adopted by Renault and Geely must be both innovative and respectful, integrating necessary advancements while preserving what has made the success of thermal engines thus far.

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