Volvo and owners Geely are spinning-off their respective engine manufacturing operations into a new standalone business that “will seek to develop next-generation combustion engines and hybrid powertrains”.

Volvo says the move will allow it to better focus on “the development of its all-electric range of premium cars”, while this new company builds the internal combustion engines it’ll use in future hybrids. By the mid-2020s, Volvo says it expects half of its sales to be EV, and the other half hybrid. As of this year, acting on a promise it made two years ago, Volvo will not release another solely internal combustion-engined car.

The new business, plans for which are “under development and subject to union negotiations as well as board and relevant authority approvals” will also supply Geely Auto, Proton, LEVC, Lynk & Co and… Lotus. Now there’s a thought.

Håkan Samuelsson, Volvo Cars’ President and Chief Executive, 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.”

STORY Tom Harrison