Ford and Geely Form Joint Venture to Build Electric SUVs at Spanish Plant

Ford and China's Geely Auto will form a joint venture to manufacture electric vehicles at Ford's factory in Valencia, Spain, with production scheduled to begin in 2028. The partnership addresses Ford's significant excess factory capacity in Europe while providing Geely with its first manufacturing foothold on the continent.

Partnership Details and Production Plans

The new joint venture will be 66% owned by Ford and 33% by Geely, the companies confirmed. Under the agreement, Geely will produce two of its own electric SUV models at the Valencia facility.

One of the vehicles is the EX5, which is already sold in Europe, while the second model is still in development, according to Geely Senior Vice President Victor Yang. In addition to the Geely-branded vehicles, the two automakers will jointly develop a new crossover SUV that will be offered with fully electric, plug-in hybrid, and extended-range EV powertrains, also slated for a 2028 production start.

A Solution for Underutilized Assets

For Ford, the deal provides a critical lifeline for its Valencia plant, which has an annual production capacity of around 500,000 vehicles but was operating at just 26% capacity in 2025, according to data from GlobalData. The American automaker's European sales have fallen sharply over the past decade, dropping from over 1 million cars to just over 426,000 last year.

Ad

"We have the ability to really load up the facility," Ford’s European head Jim Baumbick told Reuters, adding that the partnership would "leverage it for scale to compete at the right level of cost in Europe." Analysts view the move as a practical way for Ford to reduce fixed costs and monetize its excess capacity.

Chinese Automakers Secure European Foothold

This partnership marks a significant strategic win for Geely, establishing its first European production base ahead of potential European Union "Made in Europe" legislation that could mandate minimum local content. "We need to rely on strong partners with the right know-how and expertise to support our localization efforts," Yang said.

The deal is part of a broader industry trend where Chinese automakers are partnering with legacy manufacturers to gain access to the European market and its production infrastructure. Similar agreements include China's Leapmotor, which will build an EV at a Stellantis factory in Spain. These collaborations highlight a growing interdependence, even as such deals would likely face significant political opposition in the United States.