Automakers should consolidate their legacy businesses as electric cars take off with combustion engines set to be in demand for years to come, according to powertrain unit Aurobay.
Bundling non-electric assets would help to improve hybrid-combustion technology and add scale to save costs, said Michael Fleiss, CEO of Aurobay’s Swedish branch, Powertrain Engineering Sweden.
Volvo Cars and parent Zhejiang Geely Holding Group this summer finalized their Aurobay venture, which includes two powertrain plants in Sweden and China, with plans to win outside customers.
“The worst thing that can happen to the climate and the world, is that there’s no further development of these technologies,” Fleiss said in an interview. Combining different assets “would absolutely make sense economically -- it’s quite an expensive product.”
Automakers are increasingly taking steps to address the balancing act between an electric-only future and legacy combustion assets.
Volvo Cars last year said it will cease making combustion models by 2030, while Ford Motor Co. in March said it is separating its fast-growing EV operations and software development from the rest of the business.
Renault Group is set to detail plans for a carve-out of its EV assets in November, while Mercedes-Benz Group has said it will only sell electric cars by the end of the decade, where possible.