The Commoditization Of The Car Engine: How Horse Powertrain Is Carving Out A Niche No One Else Wanted

The internal combustion engine, once the heart of automotive identity, is now being treated as a commodity—and one company is betting big on building them for everyone else.

Matias Giannini, CEO of Horse Powertrain, is urging major automakers to outsource powertrain development, arguing that engines have become interchangeable commodities where brand differentiation no longer comes from the hardware under the hood. In a recent interview with Forbes, Giannini laid out a provocative vision: OEMs should focus on brand identity, software, and user experience, while leaving the gritty engineering of powertrains to specialists like Horse Powertrain.

The context for this shift is the accelerating transition to electric vehicles. As EVs gain market share, traditional internal combustion engines (ICE) are increasingly viewed as legacy technology. Automakers are slashing investment in new ICE platforms, yet billions of vehicles with engines will still be produced and sold for years, especially in emerging markets. Horse Powertrain was created exactly to exploit this gap. Formed in 2021 as a joint venture between Renault Group, Geely Holding, and others, the company inherited a portfolio of engine and transmission designs, along with manufacturing plants across Europe, Asia, and Latin America.

Key details reveal the scale of the ambition. Horse Powertrain aims to supply not just one or two automakers, but the entire industry. By centralizing production, the company can achieve economies of scale that no single OEM can match. Giannini’s pitch is simple: treat the engine like a black box—a reliable, cost-effective component. His company currently produces around 3.5 million powertrain units annually from over 10 plants. The plan is to grow that output significantly by signing contracts with multiple automakers, including some that have historically built their own engines.

Analysis shows this strategy mirrors what happened in consumer electronics. Foxconn and other contract manufacturers now build the vast majority of smartphones, laptops, and tablets, allowing brands like Apple to focus on design, software, and marketing. In the automotive world, similar trends are emerging in battery production (via companies like CATL) and now powertrains. Industry experts note that the commoditization of car engines does not mean the end of internal combustion—rather, it signals a mature technology where differentiation is minimal and cost is king. For automakers facing huge R&D bills for electrification, outsourcing ICE development frees up capital and engineering talent.

Outlook: Horse Powertrain’s model faces challenges. Automakers are notoriously possessive of their powertrain technology, viewing it as a core competency. And as EV adoption rises, the demand for new internal combustion engines will eventually peak and decline. But Giannini’s bet is that the decline will be gradual, and that hybrid powertrains will sustain volumes for decades. Furthermore, the company could pivot to supply electric drive units, leveraging its manufacturing expertise. If Horse Powertrain succeeds, it could reshape the automotive supply chain, proving that even the heart of the car can be bought off the shelf. The next milestone to watch: a public contract with a major global automaker that currently develops its own engines.