In a rapidly changing automotive world, Ford and Geely seem ready to write a new chapter in the industrial history of Europe. As traditional large factories face profitability challenges, the American manufacturer and the Chinese giant are considering a partnership that could transform the landscape of automotive production on the Old Continent.
An Agreement in Progress
Ford and Geely are currently discussing an industrial partnership focused on Europe, with the possibility of using Ford’s plant in Valencia to produce vehicles intended for the European market. This agreement would allow Geely to assemble electric models locally, thus avoiding the tariffs currently applied to vehicles imported from China. The plant, which currently produces the compact SUV Kuga, is largely underutilised, with an annual production volume falling below 100,000 units, while it could accommodate up to 400,000.
Ford and Geely are discussing an industrial agreement in Europe. For now, nothing is official, but the plant currently producing Kugas in Valencia is at the centre of discussions. © Alex Krassovsky
Valencia, the Heart of Exchanges
The discussions between Ford and Geely highlight the Valencia plant in Spain as a central point. With stagnant production, this plant could regain new life thanks to the arrival of locally assembled models. For Geely, this strategy presents a double advantage: escaping tariffs of up to 35% on imported electric cars and strengthening its presence in the European market. It is no coincidence that other Chinese manufacturers, such as Leapmotor and BYD, are adopting similar approaches by establishing production sites in Europe.
A New Era of Collaboration
Beyond the simple “factory loan”, discussions between the two giants also include a framework for technological exchange. Ford and Geely are exploring avenues for cooperation in key areas such as automated driving and electric vehicles. Currently, the industrial aspects seem to be the most advanced, but the idea of sharing research and development (R&D) costs is becoming crucial in a context where investments have become very heavy to absorb alone.
Ford has already taken initiatives in this direction, notably by producing electric models in Cologne on Volkswagen’s MEB platform. This move shows a willingness to adapt to the rapid evolution of the automotive market.
For Geely, assembling models on EU soil would have an immediate advantage: escaping tariffs that can reach up to 35%. © Geely
Political and Economic Context
Officially, neither Ford nor Geely are providing details on the progress of the negotiations. However, the political context plays a crucial role in these discussions. Since the increase in tariffs on electric cars made in China, Chinese manufacturers are seeking to “Europeanise” by establishing local factories or forming assembly partnerships. For Ford, an agreement with Geely could help increase the utilisation rate of its European sites while amortising the investments made.
However, there remains a limit to this cooperation. Any extension of the partnership to the United States would be closely scrutinised politically, due to distrust towards Chinese companies. Discussions between Ford and BYD regarding battery supply for their hybrids are a perfect example.
A Long-Term Strategy
Geely is not entering unknown territory. By controlling brands such as Volvo and Lotus, and being involved in Polestar, it demonstrates a clear willingness to diversify while maintaining a certain autonomy in its production. The group’s management has also expressed a desire to stop opening new factories and prioritise the use of existing capacities.
For both parties, this agreement could therefore be an opportunity to accelerate their respective development while addressing the challenges of the European market. This reflects a growing trend towards collaboration rather than competition in the automotive sector.
Ford and Geely have exchanged views on automated driving and, more broadly, on elements related to electricity and connectivity. © Geely
Conclusion: A Future to Build Together
As the automotive industry undergoes an unprecedented transformation, the rapprochement between Ford and Geely could represent a model for other manufacturers to follow. By combining forces and resources, these two giants could not only face the challenge of the energy transition but also redefine the rules of the game in the European market. Now, all eyes are on Valencia, where the future could be written in letters of collaboration.
