Geely Holding and Volvo Cars have announced a new joint venture company, Aurobay, to manage their powertrain operations. The new standalone firm will be a global supplier of complete powertrain solutions, which include next-generation internal combustion engines, transmissions and hybrid solutions.

Aurobay will initially be jointly owned by Volvo and Geely, with the former transferring all assets in its wholly owned subsidiary, Powertrain Engineering Sweden. The assets include its Skövde engine plant in Sweden and the related R&D team, plus its engine plant in China and other relevant assets in the coming months.

With the complete transfer of assets, Volvo said it can then fully focus on the development of its new range of pure electric premium cars. As a reminder, the Swedish automaker has big ambitions – it plans for 50% of its global sales volume to comprise of fully electric cars by 2025, while the remaining 50% will be hybrids. The powertrains used in these vehicles will all be supplied by Aurobay. By 2030, all cars within the Volvo family will be purely electric.

Equipped with a strong R&D team and cutting-edge technologies, Geely Holding said the new entity is capable of developing and producing advanced and efficient electrified powertrains for its family of brands, creating a strong base for substantial operational, industrial and financial synergies.

Besides supplying powertrains across the Geely family of brands, Aurobay also has the ambition to supply them to other parties. In the long term, it plans to be a leading player in the supply of high-quality, low emission, cost-efficient powertrains solutions.