As car manufactures switch to electric, Horse in London, Renault from France, Geely from China and Saudi Aramco which owns the world’s largest stake of oil, go all in for combustion engines.
Saudi Arabia’s oil company Aramco wholly owned by the Saudi Arabian government is one of the world’s wealthiest companies and is by far sitting on the world’s greatest amount of oil reserves. While Aramco does invest in what seems like noble deeds – in hydrogen energy for instance – its actions of actually developing mega real estate projects such as Neom (dock your mega yacht here) and investing in combustion engine tech shows that Saudi Arabia is planning that its oil reserves will be relevant for generations to come.
The world experienced the two hottest days on record this year, on Sunday and then again it broke the record on Monday, due to climate change but for oil companies like Aramco its business as usual. Or rather, bringing business back to the 80s by investing in combustion engines.
Aramco’s market cap in 2024 was $1.814 trillion with its primary business as the exploration, production, refining, and distribution of petroleum and petrochemical products. The company is significant to Saudi Arabia´s economy, which relies heavily on oil revenues although the country is trying to be open to Western values and tourism and development in the last 5 years.
Saudi Aramco went public in 2019, leading to the largest IPO in history, raising $29.4 billion USD. Despite the large amount of cash raised, only 1.5% of the company was actually floated, with the rest still owned by the Saudi government.
Among the many directions that Aramco is taking – including investing in AI chips – Saudi Aramco is betting that the internal combustion engine found in cars, trucks, ships and airplanes, will be around for a “very, very long time”. The world’s largest oil company does see opportunity from the rise of the electric car from its $500bn in revenues last year to take a $800 million or 10 per cent stake in Horse Powertrain, a company based in London and dedicated to building fuel-based engines.
Saudi Aramco, Chinese carmaker Geely and the French Renault, are investing in London-based Horse as the as the industry stops designing and developing its own combustion engines, it will need to start buying them from third parties:
“It will be incredibly expensive for the world to completely stamp out, or do without internal combustion engines,” said Yasser Mufti, the executive VP at Saudi Aramco responsible for the deal. “If you look at affordability and a lot of other factors, I do think they will be around for a very, very long time.”
Asked if he thought there would be internal combustion engines forever, Mufti said yes. Saudi Aramco has previously said it believes that even in 2050, more than half of all cars will still run on some sort of fuel. Horse is the “horse” they are better on.
Horse is headquartered in London with operations in Argentina, Brazil, Chile, Portugal, Romania, Spain and Türkiye. The powertrain plant in Bursa, which was part of Oyak Renault until recently, is now Oyak Horse, a new company set up under a partnership between Oyak and Horse Holding.
Horse Powertrain Limited is a joint venture holding aimed at producing powertrains, including internal combustion engines and hybrid systems.
The venture holding was established in May 2024 and is equally owned by Renault and Geely. It is headquartered in London, United Kingdom.
Zhejiang Geely Holding Group Co commonly known as Geely, is a Chinese multinational conglomerate headquartered in Hangzhou, Zhejiang. The company is privately owned by Chinese entrepreneur Li Shufu, and mainly engaged in the automotive industry.
So while car companies such as Ford and GM are pressured by shareholders to shift over to electric engines, the Chinese and Europeans are opening new businesses based on what was supposed to be “past” technology.
Consider that in 2021, GM announced its intention to sell only electric vehicles by 2035.
Electric vehicles are supposed to be the only kind of vehicle on the road in countries like Canada by the year by the year 2035. The new Canadian standard requires all new light-duty vehicle sales in Canada to be electric or plug-in hybrid by 2035. There are also interim targets of at least 20 percent of all sales being EVs by 2026 and 60 percent by 2030.
A growing number of people are buying electric cars, but range anxiety while towing boats or driving hours between cities in northern areas in North America is still a major concern. In rural areas of Canada and the US, locals are concerned about regular access to the grid and blackouts that can be regular during summer and winter storms.
We drove a Tesla this summer and enjoyed the acceleration speed and the cost of $20 a fill up versus $90 for the same sized car. My cousin loved hers so much that she traded in her second vehicle, a Ford truck, for a second Tesla. In her case, rural living means so much more driving for the kids. She estimates saving about $500 or more per car per month, on fuel alone.
Saudi Arabia needs to bet on the combustion engine because the lifestyle of Saudi Arabia depends on it. The moment we stop the oil and gas industry, we will solve the biggest problems with climate change and conflict in the Middle East. I find it interesting that London and the French are in on the game. We expect this from China and Saudi Arabia but opening new businesses for combustion engines? Sounds criminal to the climate movement.
::Horse
