In a packed hall at the Beijing Auto Show earlier this year, Matias Giannini stood before a room full of automotive executives and delivered a bombshell no one saw coming: “What if I told you that 80% of vehicles produced by 2035 would be EVs?” The crowd reeled. Given that even aggressive estimates put the number no higher than 55-60%, their reaction was expected. Besides the obvious investment issues, the infrastructure to support this claim simply wasn’t in place.
Then came the twist. Giannini wasn’t predicting the future—he was reframing it. Replace the fleet of inefficient combustion engines still rolling off assembly lines with the highly efficient hybrids that already exist today, he argued, and you get the same emissions outcome as an 80% EV world—without waiting for a grid, a charging network, or a battery supply chain that didn’t yet exist.
It’s the kind of statement that could get a CEO laughed out of a room built on a decade of EV-only orthodoxy. Instead, people listened. Because Giannini runs Horse Powertrain—a two-year-old, Chinese-European joint venture born out of a carve-out from Renault and Geely and he’s not selling nostalgia for the internal combustion engine. He’s selling something far more radical: the idea that engines—the very thing car companies have spent a century building their identity around—no longer deserve a place at the center of the boardroom table.
I sat down with Matias Giannini to find out what happens when someone convinces the world’s biggest carmakers that the thing sitting under the hood—the very heart of what a car company believes itself to be—has quietly become a commodity.
Back Where It All Began
Horse Powertrain’s origin is a story unusual enough to be worth telling properly, because it explains why the company can say things that would sound heretical coming from anyone else. In November 2022, Renault Group and Zhejiang Geely Holding—two carmakers that compete against each other in nearly every market on earth—announced they would do something almost unheard of in the industry: merge their combustion-engine and hybrid powertrain divisions into a single, independent joint venture. Renault would contribute its powertrain arm, a 125-year-old lineage of engine engineering headquartered in Madrid, while Geely would bring Aurobay, the Swedish-and-Chinese powertrain business it had inherited through its ownership of Volvo, headquartered in Gothenburg and Hangzhou Bay. Both companies transferred their intellectual property—not licensed it, transferred it—into the new entity. The resulting entity, Horse Powertrain Limited, was established in May 2024 and was initially owned equally by two automakers who, on paper, had every reason to distrust each other. Seven months later, Saudi Aramco bought a 10% stake, shrinking Renault’s and Geely’s stakes to 45% each while bringing decades of expertise in alternative fuels.
Matias Giannini, a Brazilian-born, US-raised veteran of nearly three decades at tier-one suppliers Continental and Vitesco, was brought in from outside both parent companies to run it. That detail matters more than it might seem. It’s the difference between a joint venture serving its two founders versus one that can credibly tell every other OEM on the planet: we are not here to help Renault or Geely beat you. We are here to help you stop worrying about this problem entirely.
Shifting the Focus from Emissions
For nearly two decades, the automotive industry has been judged by what comes out of the tailpipe, so much so that it has shaped an entire generation of policy and consumed billions of dollars in investment. I remember once my discussions with a C suite of a large German car marker about a decade back, and I told him he needs to fire or re-train his tens of thousands of Mechanical powertrain engineers and convert them into electrical, electronic or software engineers. I was almost thrown out of the gates.
By 2030, if current projections hold, there will be 2 billion vehicles on the world’s roads and of these about 1.8bn will still be running on some form of combustion engine. It is a number that sits uneasily alongside the narrative of an all-electric future—not because the transition isn’t happening, but because its timeline is longer, messier, and more layered than the popular imagination allows. Matias Giannini built his career around that uncomfortable arithmetic. And as CEO of Horse Powertrain, he is not arguing against the electric vehicle—far from it—but making the case that somewhere between today’s fossil-fuel fleet and tomorrow’s fully electrified one lies a vast, underserved middle distance, and that the industry ignores it at its peril.
A decade later that German OEM has done exactly what I had recommended.
The Emotional Disconnect
The thesis Giannini is pitching to the industry is deceptively simple, and it cuts against a hundred years of automotive self-image. In his view, any major auto show today has hundreds of manufacturers and wildly different vehicles, from city cars to off-road pickups. But under all that—under the hood—sits a 1.5-liter or 2.0-liter engine. In every vehicle. In China—which he calls a trendsetter for the industry—that convergence is already near-total. Most consumers, he points out, don’t know or care whose engine sits beneath the badge—what they care about is the badge, the interior, the software, the way the car feels to sit in. He realizes that powertrains are so close to the heart of OEMs that it’s hard to make the emotional disconnect, but also stresses they are commoditized, whether OEMs accept that or not.
What he thinks is forcing the issue is the rise of the software-defined vehicle. He mentions something he saw in Beijing that he thinks most of the industry hasn’t fully absorbed yet: after a chaotic few years where Chinese buyers simply chased whatever looked best that week, loyalty is climbing again. But this time it’s being rebuilt not around what’s under the hood, but around the AI assistant a driver talks to, the way a cabin’s displays feel, the personality a brand projects through its software. His pitch to every CEO he meets follows that observation, urging them to invest in areas where they can actually win customer loyalty and to stop pouring capital into an engine bay that, in his view, nobody will ever fall in love with. The resistance, when he encounters any, is emotional and tends to come from engineers rather than executives. Once an OEM’s leadership is convinced Horse Powertrain is genuinely independent—that it isn’t a Trojan horse for Renault or Geely—the business logic, he says, “is so obvious, is so appealing,” that the conversation moves quickly.
Rethinking Hybrid, Not Just Rebadging It
Of course, none of this would matter if Horse’s technology weren’t genuinely differentiated—and this is where the company’s engineering philosophy gets interesting. Giannini believes that the auto industry’s hybrids have inherited a design flaw from history—they evolved by bolting electric motors and small batteries onto existing combustion-engine architectures. This means that every OEM that wants both a ‘real’ EV and a hybrid ends up running two parallel product lines, two assembly lines, two engineering teams, doubling its capital investment in a market where volumes for each are shrinking relative to a full lineup.
Horse Powertrain’s answer, branded the ‘X-Range Family’, inverts the logic: designing the hybrid system to slot into an EV architecture from the outset, rather than adapting an ICE architecture to accept electrification. Their flagship example is the C15, a range-extender unit—engine, fuel tank, and exhaust integrated into a single package—engineered to be exactly the height of a battery pack, so it drops into the space freed up by shrinking the battery, with no structural changes to the vehicle. Giannini calls it the suitcase range extender because that’s what it looks like. The commercial logic, Giannini explains, is that the battery savings more than cover the cost of the added hybrid hardware—meaning OEMs can offer customers more range and lower emissions for less money, without having to run two separate vehicle programs to do it, creating, in his words, ‘a win-win for the OEM, and a win-win for the consumer.’
Along with the C15, the X-Range includes two other solutions that are designed to outright replace an existing electric drive unit with a pre-integrated hybrid powertrain, inclusive of an engine, transmission, traction motors, and power electronics. Owing to their extremely compact profiles, these other X-Range products allow OEMs to turn an EV into a full-on parallel hybrid.
The Range Extender’s Second Act
Giannini believes that the range extenders category—vehicles that pair a small onboard generator with an EV drivetrain—was pioneered by Chinese ‘new energy’ manufacturers founded to build EVs exclusively, who added range extenders almost as an afterthought. Rather than cannibalizing EV sales, range extenders expanded the customer base, drawing in combustion-engine loyalists who liked the idea of an EV but weren’t ready to commit. Data also showed that after that first purchase, they become more exposed to charging and to how an EV works, making today’s range-extender buyer tomorrow’s full-EV customer.
The technology, after its success in passenger cars (also reported in my article Range Extender Cars: Why Your Next Electric Car Should Carry A Gallon Of Gas), is moving toward an entirely different use case: commercial vehicles, where the total cost of ownership is critical, and downtime is the enemy. Pickup trucks, delivery vans, construction-site LCVs—vehicles that simply cannot afford range anxiety—are increasingly requesting range-extender configurations, and Horse Powertrain’s compact packaging is designed to serve exactly that demand without forcing a redesign of the vehicle around it.
Giannini expects range extenders to account for roughly 3-5% of the market by 2035—in line with the projection from my team at MarketsandMarkets—though he suspects the European figure could climb well beyond that if the region’s large light-commercial-vehicle segment embraces the technology, as it has in China.
The Bigger Bet: Alternative Fuels and a Flexible Endgame
Horse Powertrain’s ambitions don’t stop at hybrids. The company is deliberately engineering its powertrains to be fuel-agnostic—capable, in time, of running on ethanol, methanol, LPG, CNG or hydrogen, alongside conventional fuels. Giannini notes that it already has hydrogen prototypes in advanced engineering and cites Brazil—where 83% of vehicles run on flex-fuel ethanol engines—as proof that fuel flexibility isn’t a distant technical fantasy but an operational reality in parts of the world today. Aramco’s stake in the company is itself a signal of intent: the energy giant brings decades of synthetic and alternative-fuel expertise to a partner explicitly building engines to accommodate whatever comes next as the economics of those fuels improve.
Structurally, the company is positioning itself as a consolidator. Giannini mentions M&A as a strategy, saying they will consider anything that adds value to the business model—from technology acquisitions to supplier consolidation. Horse Powertrain will even consider absorbing powertrain operations of other OEMs looking to exit the business entirely, much as Renault itself did to create Horse Powertrain in the first place. An IPO, by contrast, he waves off for now, not as a rejection of the idea but as simply premature for a company generating strong free cash flow and still building out its footprint. “I never say no,” he said, “because every private company should always have that dream of becoming so attractive that external investment becomes a natural step.”
The Uncomfortable Pitch
What makes Giannini’s argument land—and what makes Horse Powertrain worth watching regardless of whether every prediction plays out—is that it asks automakers to accept something deeply uncomfortable: that the thing many of them still consider their engineering soul has become, in his words, a commodity best outsourced. He’s careful to frame this as liberation rather than diminishment, though. Horse Powertrain isn’t trying to replace OEMs’ brand identity, design language, or software—it wants to take the one piece off their plate that no longer gives them any competitive advantage, so they can pour everything they have into the pieces that still do. It’s a case he makes with the ease of someone who has made it a hundred times before, in boardrooms from Stuttgart to Shanghai, and expects to make it a hundred times more before the industry fully comes around.
Brazilian by birth and global in outlook, Matias speaks English with an American accent, has lived and worked across Brazil, Germany, and the United States, and is as comfortable discussing soccer as golf. As a leader, he believes deeply in the power of teams—‘the sky’s the limit when you have the right people,’ he says—a philosophy that finds its clearest expression at Horse Powertrain. Bringing together some of the brightest minds from more than half a dozen countries, the company required a leader capable of uniting a remarkably diverse group around a common purpose. Matias has done exactly that, with characteristic poise.
Conclusion
Picture a dealership showroom, some year in the not-too-distant future. A customer walks the floor and, for the first time in the history of the automobile, does not ask for electric or combustion engines. That’s because there is only one vehicle. That is what Matais Giannini is betting on—a future in which the engine becomes nothing more than a commodity: interchangeable, unglamorous, and entirely beside the point. Not gone. Not defeated by the battery. Just absorbed, the way every great industrial argument eventually resolves. Somewhere between the billion combustion engines still turning over in 2040 and the electric future everyone agrees is coming, Giannini has found the one bet that manages to take both seriously: build the car first, and let the engine underneath it become, at last, unremarkable.
For Matias Giannini, the highest compliment an engine can earn is that no one notices it at all.
