India Set to Clear $370 Million Hybrid Engine Investment with Chinese Links

• India poised to approve a $370 million manufacturing investment by Horse Powertrain.

• Venture backed by Geely (45%), Renault (45%) and Saudi Aramco (10%).

• Marks one of the largest Chinese-linked auto investments since 2017.

• Hybrid engine production to begin at Renault’s Chennai facility.

India is preparing to approve an investment of approximately $370 million by Horse Powertrain Ltd., a hybrid-engine manufacturer backed by China’s Zhejiang Geely Holding Group and France’s Renault SA. If cleared, the proposal would represent one of the most significant manufacturing commitments by a Chinese-linked automotive company in India in nearly a decade.

According to individuals familiar with the discussions, the investment will allow Horse Powertrain to channel funds into Renault’s existing production infrastructure in India. The company plans to manufacture advanced hybrid engines and powertrains locally, strengthening domestic production capabilities in a segment that is gaining traction among Indian consumers.

The expected approval is notable because it follows India’s decision in March to ease certain investment norms for companies based in neighboring countries. The relaxation is designed to boost domestic manufacturing and comes after several years of tight scrutiny on Chinese capital following border tensions in 2020.

The last major Chinese automaker to make a substantial entry into India was in 2017, when state-owned SAIC Motor Corp. acquired General Motors’ manufacturing plant to introduce the MG Motor brand. That operation has since undergone restructuring and is now majority-owned by Indian stakeholders led by the JSW Group.

Horse Powertrain itself is a relatively new entity, formed in 2024 as a 50-50 joint venture between Geely and Renault. Saudi Aramco later acquired a 10% stake, leaving Geely and Renault with 45% ownership each. Headquartered in London, the company operates 18 manufacturing plants worldwide and employs roughly 19,000 people.

Sources indicate that Horse’s India strategy will be implemented in phases, beginning at Renault’s plant in Chennai, Tamil Nadu. The facility already produces vehicles for both Renault and Nissan, with Renault being Nissan Motor Co.’s largest shareholder. The new investment will focus on producing strong-hybrid powertrains that integrate internal combustion engines with powerful electric motors and battery systems.

These hybrid systems are expected to power upcoming Renault and Nissan models sold in India. Renault is reportedly preparing to launch a new Duster SUV later this year featuring Horse-supplied hybrid technology. The company is also said to be in early talks with additional automakers to supply hybrid powertrains in the future.

In a statement to Bloomberg News, Horse Powertrain confirmed that it has formally applied for permission to invest in India and is awaiting a final decision from authorities. India’s commerce ministry has not publicly commented on the matter.

The development underscores India’s growing prominence as a global automotive production hub. International carmakers are increasingly expanding operations in the country to diversify supply chains and capture rising domestic demand. However, substantial Chinese-linked investments have remained limited since New Delhi tightened foreign investment rules in 2020. As recently as last year, India signaled that it would maintain restrictions on Chinese electric vehicle manufacturer BYD Co.’s expansion plans.

Horse’s proposed entry also highlights the rising appeal of hybrid vehicles in India. While electric vehicle adoption continues gradually, many consumers are opting for gasoline-electric hybrids that offer improved fuel efficiency without full dependence on charging infrastructure.

For Renault and Nissan, the investment forms part of a broader effort to revitalize their India operations after years of limited market share. By focusing on sport utility vehicles and enhancing localized manufacturing, the partners aim to strengthen their footprint in one of the world’s fastest-growing automotive markets. The Horse initiative is expected to deepen domestic sourcing of advanced powertrain technology and reduce reliance on imports, aligning with India’s broader push for manufacturing self-reliance.