A new global company has been launched by French auto giant Renault and Chinese automaker Geely and is set to be based in the UK.
The companies will invest up to €7 billion ($7.7 billion; £6 billion) to develop low-emission petrol, diesel and hybrid engines.
It will employ about 19,000 workers in 17 engine factories, in addition to five research and development centers.
The deal comes even as the global auto industry shifts its focus to electric vehicle development.
Renault and Geely said in a statement that the new company will use its UK headquarters to “unify operations, build on synergies and define future plans.”
The company will be launched later this year and will supply engines to automakers such as Volvo, Nissan and Mitsubishi.
“We are proud to join forces with a great company like Geely…to disrupt the game and open the way for ultra-low-emission ICE (internal combustion engine) technologies,” said Renault CEO Luca de Meo.
Eric Lee, Chairman of Geely Holding Group, added that it plans to “become a world leader in hybrid technologies, providing low-emission solutions to automakers around the world.”
The companies also said that energy giant Saudi Aramco may join the project and that it is “establishing a strategic investment”.
Aramco – the world’s largest oil and gas company – is a major emitter of greenhouse gases that contribute to climate change.
Earlier this year, Aramco President and CEO Amin Nasser said the company would increase its investment in low-carbon technologies.
The Renault-Geely deal comes as demand for electric cars continues to grow in countries around the world, including the UK.
However, a typical new electric vehicle (EV) is still more expensive than a petrol or diesel vehicle.
In recent years, Geely which is headquartered in Hangzhou has also been investing in making electric vehicles.
A decade ago, it bought London Taxi, a Coventry-based manufacturer of black cabs, in a deal worth £11.4 million ($14.8 million).
In 2017, the cab maker was renamed the London Electric Vehicle Company, to highlight its focus on switching to EV technology.
It has developed London’s first electric black cab, with around 5,000 cars on the capital’s streets.
