Ford Motor Company and Chinese automaker Geely Auto announced Thursday that they will join forces to produce low- and zero-emission vehicles at Ford’s manufacturing facility in Valencia, Spain.
The deal is designed to breathe new life into Ford’s presence in the European auto market, where the longtime American carmaker is struggling to keep pace with Chinese competitors that have been rapidly gaining ground in vehicle sales worldwide.
The announcement comes at a complicated time for the American electric vehicle industry, with rising global tensions tied to U.S. tariff policy adding pressure. While current U.S. policy effectively shuts Chinese automakers out of the American market, U.S. companies still work with Chinese partners for production — and Chinese vehicles are beginning to make inroads across North America more broadly.
The joint venture is still subject to regulatory approval. Once finalized, Ford will hold a two-thirds ownership stake and Geely will own the remaining third. Geely is also the parent company of brands including Volvo and Polestar.
Together, the two companies plan to focus on five vehicles at the Spanish plant. Ford will continue building the Ford Kuga plug-in hybrid and will add a new Bronco SUV, with production on that model expected to kick off in 2028. Geely plans to manufacture two electric SUVs at the facility, with the first also slated for a 2028 production start. The two companies will also work together on a new “multi-energy” crossover model, also targeted for 2028.
A joint statement from the companies described the venture as a response to current market pressures: “The joint venture addresses the new realities of the European market — intense global competition, relentless cost pressure and tightening regulation — resetting Valencia to build at the industry’s emerging cost benchmark.”
Chinese automakers have surged in recent years by producing high-quality hybrid and fully electric vehicles — often called “new energy vehicles” — packed with advanced technology at competitive prices. These companies have received heavy financial backing from the Chinese government. However, they are beginning to experience a slowdown at home due to reduced consumer purchase incentives and growing competition within China itself.
As a result, Chinese automakers have been expanding into other markets across Asia, Latin America, and parts of Europe. Ongoing conflict in the Strait of Hormuz has also increased global interest in electric vehicles by affecting the world’s crude oil and liquefied natural gas supply.
For Geely, the Ford partnership expands its manufacturing footprint in Europe. For Ford, it helps keep workers employed at the Valencia plant, according to industry experts.
Ford’s European sales have been declining for years. The company sold more than one million vehicles across the continent a decade ago, but that number dropped to under half a million last year. The Valencia plant has a capacity of 500,000 vehicles annually, yet production there fell below 100,000 in 2025.
The cost-sharing arrangement is expected to ease financial strain on Ford. The two companies have a prior business relationship — Ford sold Volvo Cars to Geely back in 2010.
American automakers have poured billions into electric vehicle development over the past several years. However, the Trump administration has shifted course on clean vehicle policy, rolling back fuel economy standards and tailpipe emissions rules. The administration also scrapped a former goal of making half of all new U.S. vehicle sales electric by 2030, and signed legislation ending federal tax credits for both new and used EV purchases.
With EV sales uncertain in the U.S., American automakers may see greater opportunity in the European market — but analysts say more partnerships may be necessary to stay competitive there.
Sam Fiorani, vice president at AutoForecast Solutions, offered this perspective: “Like GM before it, Ford has been slowly reducing its reliance on Europe. Now, with the help of Geely, Ford can have new products designed for the European market without bearing the full development costs of a new platform.”
Fiorani added a note of caution: “While Chinese automakers like Geely continue their growth around the world, Ford should take this opportunity to learn how to cut costs and develop lower-priced vehicles. If Ford cannot compete on price in Europe, the automaker may need to look at selling plants outright rather than sharing them. Losing Europe could hurt Ford’s standing as a global automaker, but continuing to have the region drain its finances could be more devastating.”
