As electrification sweeps across the global automotive industry, the debate over the path to carbon neutrality is becoming increasingly polarized.More and more industry players are falling into a binary mindset: does carbon neutrality equal full battery-electric adoption?On one side, capital markets and some regional markets are doubling down on BEVs. On the other, the reality across global markets remains highly fragmented — nearly half of the world is still unable to support a fully electric ecosystem in the near term. Every powertrain supplier now faces a difficult strategic choice: go all-in on BEVs, or pursue multiple technology pathways that better reflect regional differences.In an exclusive interview with Gasgoo's C Talk, Horse Powertrain's CEO Matias Giannini offered a differentiated perspective: battery-electric vehicles are a core pathway to carbon neutrality, but not the only one. A multi-technology strategy is the most pragmatic solution for today's global markets and the fastest way to accelerate industry-wide decarbonization.As a differentiated "Tier 0.5" powertrain newcomer, Horse Powertrain leverages the backing of two major shareholders — Geely and Renault — while maintaining independent market-oriented operations. Through its full-spectrum powertrain portfolio, global industrial footprint, and dual China-Europe market DNA, the company aims to break the industry's increasingly rigid technological polarization and provide automakers with a more balanced solution that combines speed, cost efficiency, and low-carbon performance.Breaking the Binary Mindset: Multiple Pathways Are Becoming the Industry ConsensusFor years, "full electrification" has dominated the automotive transformation narrative, while internal combustion engines and hybrid technologies were often labeled as outdated.In Matias Giannini's view, this is one of the industry's biggest misconceptions today.According to forecasts from leading research institutions, global EV penetration is expected to reach only 50–55% by 2040. Battery material shortages, uneven charging infrastructure, vehicle affordability gaps, and differing consumer preferences across regions mean that nearly half the global market will not transition fully to BEVs anytime soon.More importantly, in regions where electricity grids remain carbon-intensive, highly efficient hybrid vehicles can actually deliver lower lifecycle emissions than BEVs. This highlights a critical reality: relying exclusively on BEVs may not accelerate global carbon neutrality, but instead create market fragmentation and resource inefficiencies.Against this backdrop, Horse Powertrain has focused on the remaining half of the market by adopting a multi-pathway strategy centered around high-efficiency internal combustion engines, entry-level hybrids, advanced hybrids, and range-extender technologies. The goal is to address the diverse low-carbon transition needs of markets at different stages of development.Regional differences are already becoming increasingly clear:* China embraces BEVs, PHEVs, EREVs (Extended Range Electric Vehicles), and hybrids simultaneously, with hybrid demand continuing to rise.* Europe leans heavily on hybrid technologies for mid-term energy transition, while EREVs are stepping into a new growth phase backed by favorable policies and strong market demand.* The U.S. market still relies heavily on gasoline and mild-hybrid solutions, leaving significant untapped hybrid potential.* Emerging markets urgently need affordable and reliable basic powertrain solutions.These regional differences are driving growing demand for customized powertrain solutions — precisely where Horse Powertrain believes its business model creates value.A New "Tier 0.5" PositioningHorse Powertrain neither builds complete vehicles nor operates as a traditional single-category Tier 1 supplier. Its self-defined "Tier 0.5" positioning is central to its competitive advantage.The company is among the few in the industry capable of independently developing and manufacturing both engines and transmissions, while combining global operations, China-style rapid iteration, and deep European engineering expertise. Its product portfolio reportedly covers more than 80% of global market demand and already serves 25 OEMs worldwide.One recurring question from the market is whether the company's ties to Geely and Renault could limit its ability to attract other OEM customers.Matias Giannini's response was clear: independent operations have been a core principle ever since Horse Powertrain's founding.Horse Powertrain maintains independent ownership of its intellectual property, manufacturing facilities, and R&D teams. Geely and Renault are founding shareholders and strategic customers, but the company positions itself as a neutral third-party supplier capable of serving all automakers globally. In doing so, it hopes to reduce duplicated development efforts and high investment costs across the industry while acting as a bridge for platform-level collaboration between OEMs.Today, Horse Powertrain has established an initial global footprint with 18 production facilities and five major R&D centers across three continents, while continuing to expand into North America and India. Its localized manufacturing and supply-chain strategy is designed to help customers mitigate geopolitical and tariff-related risks.Dual-Market DNA: Connecting China and EuropeChina is currently Horse Powertrain's largest single market globally and also a critical source of innovation. The company says rapid localization and extreme cost-efficiency have become embedded in its operating DNA.The vastly different development logic of the Chinese and European markets has created very different product demands:* Chinese consumers prefer high-torque, compact hybrid transmissions and four-cylinder engines.* European markets prioritize carbon-emissions control and favor highly efficient small-displacement three-cylinder engines.To meet these needs, Horse Powertrain has developed dedicated product portfolios for each market — including complete super-hybrid transmission systems for China and highly efficient low-emission engine solutions for Europe.Earlier this year, Matias Giannini also announced a global organizational restructuring that integrates manufacturing and R&D operations worldwide, breaking down regional silos and enabling cross-market learning. European teams are adopting China's rapid-response and cost-control mindset, while Chinese teams are learning from Europe's mature development processes and stringent quality standards.Compared with many foreign companies that struggle to localize in China — and Chinese firms facing challenges expanding overseas — Horse Powertrain believes its dual China-Europe market DNA gives it a unique competitive edge.Technology Innovation: Rebuilding the Hybrid ArchitectureTechnology innovation remains at the heart of Horse Powertrain's strategy. At Auto China 2026, the company unveiled several flagship products showcasing its latest engineering capabilities.One of the highlights was its next-generation hybrid system.Traditional hybrid systems are often adapted from gasoline platforms, resulting in heavier structures, lower efficiency, and higher costs. Horse Powertrain's solution introduces a "native hybrid architecture" designed directly for BEV platforms.The system highly integrates the engine, electric motor, and electronic control systems into a single architecture capable of supporting both BEV and hybrid variants. This helps automakers reduce the burden of maintaining separate EV and hybrid development platforms.The technology is now in its third generation, covering displacements from 1.5L to 2.5L, with mass production expected as early as the end of 2028.The company also showcased two range extenders developed specifically for EVs, alongside what it describes as the world's smallest and lightest V6 engine in its class. These products target a wide range of applications, from family vehicles to off-road and luxury segments.On the R&D side, Horse Powertrain says it spent nine months conducting comprehensive market research to evaluate long-term demand through 2035. By streamlining redundant product lines and focusing on core powertrain platforms, the company aims to maximize market coverage while improving cost efficiency through scale production.AI-Powered Manufacturing TransformationIn the race toward industrial intelligence, artificial intelligence has become a core driver of transformation.According to Matias Giannini, AI is no longer a future trend — it is already reshaping the industry today.Horse Powertrain has elevated AI to its highest strategic priority and has already deployed AI technologies extensively in manufacturing. Its core factories now use full-scale data collection systems and digital twin technologies to create virtual simulation models for certain engine programs. By continuously comparing virtual and physical production data, the company says it has improved quality control and manufacturing efficiency while saving millions of euros annually.At its Zhangjiakou production base, machining-center automation has reportedly exceeded 90%, with industrial robots enabling fully automated material handling across the production line — bringing the facility close to "lights-out factory" status.Looking ahead, Horse Powertrain plans to expand AI applications from manufacturing into R&D, management, and customer services, with the ambition of becoming a benchmark for AI adoption in the global powertrain industry.The company also emphasized the growing need for interdisciplinary talent that combines business understanding with technical expertise. In the long term, Matias Giannini believes uniquely human capabilities — such as creativity and customer insight — will remain irreplaceable competitive advantages.Global Collaboration: Supporting Chinese Automakers Going OverseasWith its dual-market DNA and global supply-chain network, Horse Powertrain positions itself as an ideal partner for Chinese automakers expanding internationally.Matias Giannini believes Chinese automakers already possess world-class strengths in rapid iteration and innovation. However, the biggest barriers to globalization now come from geopolitics, regulatory complexity, and cultural differences.His key recommendation is straightforward: embrace openness and collaborative ecosystems.Localization, globalization, carbon neutrality, and intelligent transformation all depend on global industrial cooperation. In an increasingly complex industry environment, cross-industry collaboration and shared development will be essential for automakers to navigate future challenges successfully.Horse Powertrain's development philosophy reflects a long-term approach: it does not blindly follow a single technology trend, but instead embraces diversified pathways toward carbon neutrality; it does not limit itself to regional markets, but continues building a global footprint; and it does not cling to traditional models, but evolves continuously through technology and AI.As the industry becomes increasingly polarized around technology routes, this Tier 0.5 company hopes to support the automotive sector's long-term transition through a combination of full-spectrum powertrain solutions, global operations, and open collaboration.In addition, Matias Giannini shared his insights on topics including R&D resource allocation, supply chain resilience, and talent development across the industry.For more details, please refer to the full interview video.
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