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Volvo and Geely form joint venture to keep engine production going

Swedish manufacturer finds a unique way to avoid ICE production

Volvo engine
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A new joint venture between Volvo Cars and its parent company Geely will see the two form a new, standalone firm to produce a range of internal combustion engines as the world moves towards electric vehicles.

Aurobay will take over from Volvo in producing ICEs for its range of existing vehicles while the Swedish manufacturer focuses on its EVs, targeting 50 per cent of vehicle sales to come from fully-electric cars by 2025 with an ultimate aim of 100 per cent electrification by 2030.

Volvo's existing assets from its Swedish engine plant, including research and development staff, will be moved across to Aurobay over the coming months, as will assets from the Volvo and Geely engine plant in China.

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Volvo will wind up ICE production by 2030 with all vehicles becoming fully-electric

Geely is set to benefit from the joint venture through its acquisition of Volvo's combustion engine experts, helping the development of its hybrid power units too, which will be instrumental in the transition from ICEs to EVs.

The announcement comes off the back of a large range of investments by Volvo in joint ventures relating to the production of its future vehicles, from the formation of an in-house battery development company and a commitment to developing fossil-free steel, to its plans to use LiDAR tech in autonomous vehicles.

Volvo is already taking steps towards lowering emissions, having ditched diesel power in its Australian range of the updated XC60 SUV as all variants score hybrid assistance.

Jordan Mulach
Contributor

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