Why electric mobility depends on the continuity of gasoline engines

The small internal combustion engine that equips most of the world’s cars will continue to be key to the growth of electric mobility

Some took a clear path to go to electric cars more quickly and did not make the transition from combining gasoline and kW. Others preferred to start with the hybrids as a first approach to lower polluting emissions. In the middle there were those who bet more heavily on the plug-in hybrids that allow pure electric operation for a number of kilometers sufficient for short-distance urban use. No one has the absolute truth on this transformation from thermal to electric technology facing the automotive industry.

Among those who saw the electric future as a definitive final scenario and quickly bet on it are Mercedes Benz, Volvo, Volkswagen, some brands of Stellantis and Renault. There were even others like Fordthat with the decision to go for electrification as a pillar of its future construction, decided to divide the company, so as to maintain separate accounts between the one that continues to manufacture the current thermal cars and the one that produces the current and future electric ones.

Renault is another company that is taking a similar path, betting heavily on electrification from different aspects, but also separating both businesses with the clear purpose of growing as a manufacturer of battery-powered vehicles without the drag of fossil mobility that could be a kind of ballast at some point.

The split is expected to be announced in the coming months with a unit dedicated to electric vehicles in France, and another unit abroad, which would unify the production sites of Spain, Portugal, Turkey, Romania and Latin America producers of transmissions and thermal and hybrid engines.

The pollution of thermal engines is not under discussion, but the profitability offered by producing them still unbalances the accounts of mass car brands
The pollution of thermal engines is not under discussion, but the profitability offered by producing them still unbalances the accounts of mass car brands

However, despite all these movements, while all the electrical projects were being developed globally, a reverse process of valorization of internal combustion engines that has aroused curiosity in some observers of the world of the carand that secretly begins to be seen with greater notoriety.

That assessment has nothing to do with reconsidering the environmental damage generated by burning fossil fuel. That is not in doubt and must be fought. But what has happened, almost unnoticed, is that the car thermal engine that will continue to be sold until 2035 in Europe and will continue for many more years in other parts of the planet such as Latin AmericaIt will be one of the pillars to ensure foreign currency income for brands as well as keep the world moving despite everything.

“In the industry this has always been a big debate. The final step is always the electric car, and Renault decided to start with the last link because it was clear that the step was going to be towards the electric one”told Infobae, Jorge PortugalCommercial Vice President and Operations Renault in Latin America, who also added that “That is why Renault started with electric vehicles ten years ago, due to infrastructure investment issues, and now the transition is forcing them to have hybrid vehicles, and that is why we also believe that it is a good combination to have electric and hybrid vehicles for a period until get to the level of having only electric vehicles.”

Jorge Portugal spoke with Infobae during the launch of the new Renault Oroch and gave a clear picture of the moment that the entire industry is experiencing globally
Jorge Portugal spoke with Infobae during the launch of the new Renault Oroch and gave a clear picture of the moment that the entire industry is experiencing globally

The plug-in hybrids (PHEV), are at the center of debates and discussions in Europe because it is considered that users do not use them correctlydispensing with recharging during the hours of rest of the vehicles, with which they finally end up consuming more fuel when operating only with the thermal engine, they weigh about 350 kilos more due to the battery and the electric motor that they carry on board. But well used, PHEVs have solved part of the problems that are currently being experienced in the old continent.

“That is also a great discussion in Europe, which has a specific decision to go electric, but for operational reasons, especially in recharging systems, hybridization is solving those problems”Portugal added.

But the crisis facing Europe as a region goes beyond the charging infrastructure for electric cars. The Russian gas is getting scarcer and the political decision is to stop buying from the country that Vladimir Putin rules as soon as possible. The electricity price it is at record values, which suggests that a longer period of time than just the next winter will probably approach, very difficult in terms of energy for the 27 countries of the bloc.

The charging infrastructure is one of the concerns of European governments, but the cost of electricity in record values ​​poses a scenario that is difficult to resolve in a short time
The charging infrastructure is one of the concerns of European governments, but the cost of electricity in record values ​​poses a scenario that is difficult to resolve in a short time

The European Comission has decided a “emergency intervention”trying to promote the construction of sustainable electricity generators as fast as possible, and how to reactivate nuclear reactors to generate own electricity so as not to depend on other external agents.

Ursula von der LeyenPresident of the European Commission has recognized that the exorbitant prices of electricity expose the limitations of the design of the current electricity market. “It was developed for different circumstances, that is why we are now working on an emergency intervention and structural reform”said. But the process will not be quick, and Brussels has set the year 2026 as the maximum date to completely disengage from Russian energy. This implies that it is not a conjuncture but a real situation that we will have to wait to see how it ends.

In this framework, then, manufacturers have to find a balance between continuing to produce mass-market cars, those with partial or total internal combustion, and naturally continuing investments in electric projects. And this is where the paradox of this paradigm shift in mobility occurs.

“There are countries or regions where electric mobility is very accelerated, such as Europe, China and now little by little the US, and we believe that here in the region it may come slower but it will arrive, but at Renault we also think that the mobility has to be for everyone, so we know that we cannot get out of the thermal in countries that do not have high incomes, where the cost of electric is still very high compared to current vehicles. For this reason, both thermal and hybrid, I think we still have a few years ahead of us to continue with them”Portugal reflects.

Geely would be interested in buying 40% of Renault's gasoline engine and transmission unit worldwide to ensure a business that will last for several more years.
Geely would be interested in buying 40% of Renault’s gasoline engine and transmission unit worldwide to ensure a business that will last for several more years.

Probably in that situation that is not easy to solve that Renault lives, but that is common to all manufacturers, the Chinese giant Geely and the Arab oil company Aramco would be in specific talks to take over 60% of the French brand’s internal combustion engine businessas recently revealed Europe automotive news. According to the same source, Renault would continue to be a minority shareholder in that company by retaining 40%, with Geely participating in another 40% and Aramco with 20%.

The sale will represent a Injection of foreign exchange for Renault to further boost its electrical projects in the other company that is expected to go to be listed on the stock market from 2023. But in addition, the participation of the Arab oil company pursues secure a partner for green hydrogen developmentswhich could well be applied to automobiles of fuel cellas well as for the e-fuel production.

The decision to quickly turn to electric vehicles was the path taken by Renault, which started a program called Renaulution and which consists of three stages until 2030.
The decision to quickly turn to electric vehicles was the path taken by Renault, which started a program called Renaulution and which consists of three stages until 2030.

In any case, this operation seems to be a win-win for the French brandalthough the question that arises is What motivates Geely to buy 40% of the heat engine production unit of a global brand like Renault? And the answer may not be very difficult to find. Effectively, internal combustion engines will remain the best-selling engine in the world for many years to comeand even when electrics have grown enough, there will be markets that will continue to use them. For a growing brand like Geely, it is probably better business to have such a stake than it is for Renault itself.

“Much is said that scale in the automotive industry is fundamental. We always talk about the crossing of the cost curves. When will an electric vehicle be cheaper than a combustion vehicle? And that is the big question that no one can answer today.”closes Portugal, making it very clear once again that for large factories, getting the right time to making moves is a real game of chess.

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