Stuttgart, Germany / Hangzhou, China.  Daimler AG and Geely Holding, the respective parent companies of Mercedes-Benz AG and Volvo Cars, have launched plans to collaborate on developing highly efficient powertrain systems for next-generation hybrid vehicle applications.

The cooperation is expected to see the companies work together on hybrid powertrain solutions to enhance their global competitiveness and create true economies of scale. Areas of potential cooperation include engineering, sourcing, industrialization and efficiency measures.

Both groups see efficient drivetrain technologies as central to the ongoing transformation of the automotive industry, and will accelerate the transition to emission-free driving. Both groups will use global R&D networks to work together on a next-generation gasoline engine specified for hybrid applications to be produced at the companies’ powertrain facilities in Europe and China, which could be utilized by Mercedes-Benz AG together with its established partners in China as well as the wider Geely Holding Group portfolio of brands including Volvo Cars. To this end, the export of the engine from China is considered to be an option.

Markus Schäfer, Member of the Board of Management of Daimler AG and Mercedes-Benz AG; responsible for Daimler Group Research and Mercedes-Benz Cars COO, said: “Our goal continues to be CO₂-neutrality. By 2039, our ambition is a completely carbon-neutral new passenger car fleet. The consequent electrification of our powertrain portfolio therefore is an integral part of our drivetrain strategy. To this end, we are systematically converting our portfolio, so that by 2030 more than half of our passenger car sales will be comprised of plug-in hybrids or purely electric vehicles. We are looking forward to the future; when, together with Volvo’s ICE unit and Geely, we will further extend our synergies in the field of highly efficient drivetrain systems in China and the world. At Mercedes-Benz, the newly established unit Mercedes-Benz Drive Systems will spearhead the project and create cost efficiencies.”

Hubertus Troska, Member of the Board of Management of Daimler AG, responsible for Greater China stated: “Daimler is dedicated to sustaining and enhancing our global competitiveness with our strong engineering competency and our cooperation with industry-leading partners. We have witnessed strong momentum in the development of the Chinese automotive industry over the past years, and we believe China will continue to offer great potentials in terms of innovation, efficiency and economies of scale. With this cooperation with the wider Geely Holding Group, we will not only enhance our footprints in the world’s largest automobile market, but also strengthen our position along the global industry value chain for the future.”

An Conghui, President of Geely Holding Group, President and CEO of Geely Auto Group said: “Clean and highly efficient powertrains are integral to our core competitiveness. With our full commitment to electrification supported by our new ‘Sustainable Experience Architecture (SEA)’ as the core pillar, we will continue to seek competitive advantages in R&D, Production, Supplier Management and other fields and focus on the development of premium electrified vehicles. This project reflects the need for economies of scale and targeted research and development investment in clean and highly efficient powertrains and hybrid drive systems and their applications. Together with our partner, we will jointly develop next generation of advanced technologies in order to remain at the top in the industry in times of wide-ranging change.” 

The new project with the wider Geely Holding Group is part of Mercedes-Benz’s comprehensive drivetrain strategy for the future. As part of “Ambition 2039”, Mercedes-Benz is consistently pushing towards “Electric first” with the electrification of all model variants and vehicle types, thus making a clear commitment on its way to CO₂-neutrality. In order to meet the different market requirements and various customer needs worldwide, highly efficient combustion engines are part of this transition. Mercedes-Benz remains committed to driving forward the transformation of drive systems even more rapidly and more efficiently while maintaining its technology leadership in the global markets.

Geely Holding is fully dedicated to offering its global users best in class products, services and experience through constant technical innovation, and resource integration. With this cooperation, both groups will combine their advantages and global resources to develop and produce highly efficient powertrain systems.

Daimler AG and Geely Holding are already working together to further develop the smart brand on a global basis and to provide premium ride-hailing services in the Chinese market.