Ford and Chinese automaker Geely have agreed to establish a joint venture that will manufacture electric, hybrid and other low-emission vehicles at Ford’s Almussafes plant near Valencia, Spain.
The partnership brings together an established American manufacturer with one of China’s most influential automotive groups. Ford will own 66% of the venture, while Geely will control the remaining 34%. The agreement still requires regulatory approval, but the companies expect the operation to begin during the first half of 2027, with the first new vehicles scheduled to leave the factory in 2028.
According to Ford’s official announcement about the Geely joint venture, the partnership is focused specifically on the European market. Rather than producing one shared car, it will use the Valencia facility to support a broader portfolio of Ford and Geely models with different powertrain technologies.
The deal could provide Ford with a faster route towards restoring its European passenger-car business while giving Geely its first vehicle-production facility on the continent.
Five Vehicles Will Form the Initial Production Plan
The new operation will focus on five vehicles. Ford will continue manufacturing the Kuga plug-in hybrid at Valencia and plans to begin producing a new Bronco SUV there in 2028.
Geely will manufacture two electric SUVs at the facility. The first confirmed model is the Geely EX5, an electric compact SUV already offered in parts of Europe. The second Geely model remains under development and has not yet been publicly identified.
The companies will also jointly develop a new crossover for European customers. That vehicle is expected to support several powertrain configurations, including fully electric, plug-in hybrid and extended-range electric versions. Production is scheduled to begin in 2028.
An extended-range electric vehicle primarily uses an electric motor to drive the wheels but includes a combustion engine that can generate electricity when the battery becomes depleted. Offering several powertrains from one programme could allow Ford and Geely to respond to different levels of charging access, customer demand and regulatory pressure across Europe.
The approach also reduces the risk of depending entirely on battery-electric demand. European buyers are gradually adopting EVs, but hybrids remain important in markets where charging infrastructure, purchase prices or driving patterns make full electrification less convenient.
The Deal Could Revive Ford’s Valencia Factory
The Almussafes plant has substantial production capacity but has struggled with falling utilisation as Ford reduced its European passenger-car range.
The facility can reportedly manufacture approximately 500,000 vehicles annually, yet GlobalData estimated that it operated at only 26% of capacity in 2025. The Kuga is currently the only model being assembled there, leaving considerable machinery, factory space and production expertise underused.
The Ford-Geely agreement could fill much of that unused capacity without requiring Ford to develop and finance every vehicle independently. Geely gains access to an existing European factory, while Ford can distribute fixed manufacturing expenses across a larger number of vehicles.
The partnership may also protect employment at a plant that has experienced years of uncertainty. Ford’s existing Valencia workforce is expected to transfer to the new venture, and Ford Europe chief Jim Baumbick said additional employees would probably be needed as production increases. Geely has said it does not plan to transfer workers from China to staff the facility.
Local trade unions have responded with cautious optimism. Their support depends partly on whether the agreement creates lasting jobs and integrates Spanish and European suppliers rather than turning Valencia into a basic assembly operation using mainly imported components.
Ford Needs a Stronger European Passenger-Car Business
Ford’s European position has weakened considerably over the past decade. The company previously sold more than one million vehicles annually across the continent and ranked as Europe’s fourth-largest automaker. It sold slightly more than 426,000 cars last year and had fallen to eighth place.
Several familiar Ford passenger cars, including the Fiesta, Mondeo and Focus, have been discontinued or removed from important markets. The company has increasingly concentrated on commercial vehicles, SUVs and selected electric models, but its smaller passenger-car portfolio has made it harder to compete across multiple price segments.
The joint venture allows Ford to expand without carrying the full cost of creating platforms, supply chains and manufacturing systems alone. The company could also benefit from Geely’s experience in battery-electric vehicles, software, connected technology and cost-efficient product development.
The Associated Press report on the Ford-Geely partnership notes that the agreement comes as established manufacturers face growing competition from Chinese companies offering technologically advanced electric and hybrid vehicles at comparatively accessible prices.
Ford chief executive Jim Farley has previously acknowledged the strength of Chinese EV and connected-car technology. Earlier partnership discussions centred not only on manufacturing capacity but also on whether Ford could close its technology and cost gap with faster-moving international competitors.
Geely Gains Its First European Manufacturing Base
For Geely, the venture provides something that could take years to establish independently: functioning production capacity inside the European Union.
Geely already sells vehicles in Europe and expanded its direct presence across Spain, Germany, the Netherlands, Belgium and Luxembourg in March 2026. However, the company’s current European vehicles are largely produced outside the region.
Manufacturing in Spain will shorten parts of the supply chain, make the brand appear more locally established and reduce its exposure to trade restrictions affecting vehicles imported from China.
The European Commission introduced definitive countervailing duties on Chinese-produced battery-electric vehicles after concluding that Chinese manufacturers benefited from unfair subsidies. Geely Group vehicles imported from China became subject to an additional duty of 18.8%. Locally manufactured vehicles would not face the same import duty, although they would still need to meet European safety, environmental, sourcing and regulatory requirements.
The partnership therefore offers Geely more than factory space. It provides a route to build cars closer to European customers while adapting products and supply arrangements to regional rules.
Spain Is Becoming a Major Destination for Chinese Automakers
Spain is already one of Europe’s most important automotive manufacturing centres. It ranks behind Germany as the continent’s second-largest vehicle-producing country and offers a developed supplier network alongside relatively competitive labour and energy costs.
These advantages are attracting several Chinese manufacturers. Leapmotor is preparing to build an electric SUV through its partnership with Stellantis in Zaragoza, while other Chinese groups have considered Spanish locations for European production. BYD has also identified Spain as a possible future manufacturing destination.
For Spain, such agreements can preserve industrial employment as traditional European factories search for new models to replace discontinued combustion-powered cars. They may also bring investment in batteries, software, electronics and advanced vehicle engineering.
The long-term economic value will depend on how much research, engineering and component production remain in Spain. Importing nearly completed kits for final assembly would create less value than building a deeply integrated European supply chain.
The Companies Have a Long History
Ford and Geely are not unfamiliar partners. Geely acquired Volvo Cars from Ford in 2010 for approximately $1.8 billion, creating a relationship that executives said helped the latest negotiations move forward.
Since that acquisition, Geely has developed a wide international portfolio that includes Geely Auto, Zeekr, Lynk & Co and major interests in brands such as Volvo, Polestar, Lotus and Smart.
The Chinese group has also become an experienced joint-venture partner. Geely and Renault created Horse Powertrain to develop and manufacture hybrid and combustion powertrains, while other collaborations have helped Geely technology reach markets outside China. The company’s official agreement with Renault demonstrates its preference for sharing platforms, factories and engineering resources rather than relying entirely on conventional exports.
Ford has followed a similar strategy in Europe. It has already announced cooperation with Renault on affordable electric passenger cars and commercial vehicles, while maintaining other manufacturing relationships across international markets.
The Joint Venture Still Faces Important Challenges
Regulatory approval is the first obstacle. European authorities will need to assess the venture’s ownership, competition implications and compliance with industrial and trade requirements.
The companies must also decide how manufacturing responsibilities, supplier contracts, software systems, intellectual property and vehicle quality control will be divided. Sharing a factory is relatively straightforward compared with jointly developing a vehicle that must meet the standards and brand expectations of two manufacturers.
Pricing will be another important test. Geely wants to compete effectively against other Chinese EV producers, while Ford must protect its brand and dealer network without allowing similar jointly produced models to undermine one another.
Political scrutiny could also continue. American lawmakers have criticised Ford for deepening ties with a Chinese automotive group, even though the vehicles are intended for Europe rather than the United States. Ford has responded that the European market requires it to compete directly with Chinese and other global manufacturers while becoming leaner and more cost-efficient.
A Significant Shift in Europe’s Automotive Industry
The Ford-Geely agreement reflects a wider change in the global car industry. Western manufacturers once treated Chinese brands mainly as competitors within China. They are now increasingly considering them technology partners, platform suppliers and manufacturing collaborators.
Ford gains products, shared development costs and a better chance of restoring its underused Valencia factory. Geely gains European production, industrial credibility and reduced exposure to import tariffs.
Success will depend on execution. The partners must deliver competitively priced vehicles, maintain quality, build a meaningful local supply chain and avoid allowing different corporate cultures to slow decision-making.
The first major result should become visible in 2028 when the Geely EX5, Ford Bronco and jointly developed crossover are scheduled to enter production. Should those launches succeed, the Valencia joint venture could become a model for how established European factories and ambitious Chinese manufacturers cooperate during the transition towards electric and multi-energy vehicles.
