Ford to Sell Part of Spanish Plant to Geely for EV Production, ABC Reports

Ford Motor Co. (NYSE: F) and Chinese automaker Geely (HKG: 0175) have reportedly reached an agreement for the sale of part of Ford's Almussafes plant in Valencia, Spain. The deal would allow Geely to establish a European manufacturing base for its electric vehicles, according to a report from Spanish newspaper ABC on Wednesday, which cited sources familiar with the matter.

An official announcement is expected on Thursday during a scheduled visit to the Almussafes facility by Spanish Prime Minister Pedro Sanchez and Ford of Europe President Jim Baumbick, the report stated.

Strategic Implications

For Geely, which owns European brands such as Volvo, Polestar, and Lotus, the agreement provides a crucial manufacturing footprint inside the European Union. This would enable the company to produce vehicles for the European market locally, potentially avoiding EU tariffs on electric vehicles imported from China.

For Ford, the deal offers a path to reduce fixed costs by sharing factory infrastructure. It also helps secure the future of the Almussafes plant, which has faced uncertainty as several models produced there are phased out, leaving it heavily reliant on its Kuga SUV model.

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Production and Market Impact

The agreement will reportedly enable Geely to begin production of its EX2 electric vehicle model at the Spanish plant. This move signals a significant step in Geely's European expansion strategy and reflects a broader trend of Chinese EV makers establishing local production to better compete in the region.

The partnership structure allows Ford to maintain production while adapting to shifting market demands and the transition to electric vehicles. For investors, the deal could be viewed as a pragmatic approach by Ford to optimize its manufacturing assets in Europe while solidifying the plant's operational future.