It was only last year when Geely and Renault Group formed a new engine company that aims to be a global supplier of advanced powertrains. As hybrid technology proves to be more in demand than going fully electric, their joint venture called Horse Powertrains has landed a high-profile client.

The brand we’re talking about is Mercedes-Benz and its upcoming third-generation CLA. The new compact sedan has been reported to debut with a 2.0-liter, four-cylinder turbo made by Horse Powertrain Limited in 2026.

According to Carscoops, the outsourced powertrain could put out as much as 250 PS and 360 Nm of torque, with a 48V mild hybrid system as a form of assist. While the engine is being produced in China, Mercedes-Benz will be the one to install the catalytic converter once the CLA gets assembled in Germany to ensure its compliance with emission regulations.

While it sounds odd for a Mercedes-Benz to use an engine from Geely and Renault, it’s worth noting that Geely CEO Li Shufu already has prior connections with the German manufacturer. Those include a 10% stake and a joint venture to build EVs under the Smart brand.

The compact sedan is also set to feature an advanced driving assist system (ADAS) from Momenta – a Chinese startup company that has the backing of Mercedes-Benz, and investments from GM, SAIC, and a company owned by Alibaba’s Jack Ma.

With that said, the CLA will still be offered with fully electric variants made fully by Mercedes-Benz, including a high-performance EV with AMG branding.