Aramco’s Investment in Renault-backed HORSE Powertrain: A Questionable Move Amidst Push for EVs and Decarbonisation

Saudi Aramco’s recent announcement of its plans to acquire a 10% equity interest in HORSE Powertrain Limited, a new global powertrain solutions company established by Renault Group and Geely, has raised concerns among environmentalists and industry experts. The move is seen as a strategic one for Aramco, as it aims to enhance its contribution to the global energy transition through the development and commercialisation of more efficient mobility solutions. However, the investment in a company that focuses on internal combustion engines (ICE) is being criticised as a step backwards in the fight against climate change.

The deal values HORSE Powertrain Limited at €7.4 billion, with Aramco acquiring its equity interest equally from Renault Group and Geely, each retaining 45% equity stakes. While the collaboration between the three companies is aimed at achieving a more sustainable future in the automotive industry, some experts argue that investing in ICE technology is not the way forward.

Renault Group, a French multinational automobile manufacturer, has been a vocal supporter of the transition to electric vehicles (EVs) in Europe. The company’s backing of HORSE Powertrain Limited, therefore, seems contradictory to its commitment to reducing carbon emissions. While the company’s strategy to develop a range of powertrain solutions that meet the diverse needs of the global automotive market is understandable, critics argue that the focus should be on cleaner, more sustainable technologies.

The fact that HORSE Powertrain Limited is expected to have an annual production of five million powertrain units, encompassing a complete portfolio of advanced powertrain technologies for partners around the world, is also a cause for concern. With the need to reduce greenhouse gas emissions becoming more urgent, investing in a company that will produce millions of ICE units seems counterproductive.

While Aramco’s unique capabilities in research on synthetic fuels, hydrogen, and ICE optimisation could help facilitate the development of more sustainable and accessible lower-carbon solutions, some experts argue that the focus should be on zero-emission technologies such as electric and hydrogen fuel cell vehicles.

Ahmad O. Al Khowaiter, Aramco Executive Vice President of Technology & Innovation, said, “Aramco’s investment is expected to directly contribute to the development and deployment of affordable, efficient, and lower-carbon emission internal combustion engines globally.” However, critics argue that investing in ICE technology, even if it is more efficient, is still investing in a technology that contributes to climate change.

In conclusion, while Aramco’s investment in HORSE Powertrain Limited may be seen as a strategic move to enhance its contribution to the global energy transition, it is also being criticized as a step backwards in the fight against climate change. As the world moves towards cleaner, more sustainable technologies, investments in ICE technology may be viewed as outdated and counterproductive.

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