Car manufacturer Volvo and Lotus maker Geely have announced plans to merge their combustion engine operations to create a standalone business.
The proposed new business would “represent a significant industrial collaboration” with combined procurement operations and financial synergies.
The move will support Volvo’s development of a range of electric and hybrid vehicles. The firm expects half of global sales to be electric by the middle of the next decade and the other half to be hybrids.
The business would supply engines to Geely's brands including Proton and Lotus and could also supply third-party manufacturers.
Håkan Samuelsson, president and chief executive at Volvo Cars, said: “Hybrid cars need the best internal combustion engines. This new unit will have the resources, scale and expertise to develop these powertrains cost efficiently.”
Volvo said “no reductions in the workforce are anticipated” and 3,000 employees from Volvo Cars would be merged with 5,000 from Geely's combustion engine operations, “including research and development, procurement, manufacturing, IT and finance functions”.
The collaboration will bring “substantial operational, industrial and financial synergies”, said Volvo.
The plans are subject to union negotiations and board and regulatory approvals.
Meanwhile research by Carbon Brief has revealed that more electricity has been generated in the third quarter of 2019 from renewable energy than fossil fuels for the first time in the UK.
Coal, oil and gas generated 39% of electricity while 40% came from renewable energy, and 19% came from nuclear energy.
Since 2010 renewable sources have quadrupled while fossil fuels have been on the decline, according to data.
Separately the UK has announced an Environmental Bill which will tackle issues such as air pollution, preservation of wildlife and environment, plastic waste and sustainable water management.
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