Ford and Chinese automotive company Geely Auto announced plans on Thursday to jointly manufacture low- and zero-emission vehicles at Ford's Valencia, Spain factory.
The partnership is a bid to reignite Ford’s offerings for the European auto market as the legacy carmaker seeks to compete with the likes of fast-moving Chinese companies that are rapidly dominating auto sales across the globe.
It comes amid challenges for the American electric vehicle market and increasing global geopolitical tensions driven by U.S. tariff policy. In the U.S., policy all but locks Chinese firms out of the market — though American automakers still partner with companies in China for production, and Chinese vehicles are making inroads in North America more broadly.
The joint venture, pending regulatory approval, will be owned two-thirds by Ford and one-third by Geely, which also owns brands such as Volvo, Polestar and more.
The two companies said they will focus on five vehicles.
Under the partnership, Ford plans to continue production of the Ford Kuga plug-in hybrid vehicle, as well as a new Bronco SUV, production for which will begin in 2028. Geely plans to make two electric SUVs at the plant, the first of which is also scheduled to begin production in 2028.
The automakers said they will also jointly develop a new “multi-energy” crossover model to arrive in 2028.
“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,” a release from the two companies said.
The JV aligns with Ford leadership's stance about being competitive outside its domestic market — yet the automaker's executives have publicly cautioned about Chinese EVs in the U.S.
“We leverage global partnerships and even IP (intellectual property) sharing, including with the Chinese (companies), to grow our business around the world,” Ford CEO Jim Farley said in the company's first-quarter earnings call in April. “How I would think about it is Ford continues to be a global company. We want to have the rights to win around the globe. We need IP and partnerships outside the U.S. to do that. And when it comes to the U.S. industry itself, we are extremely protective, as we should be.”
Chinese automakers have been gaining momentum in recent years as they produce high-quality and efficient hybrid and pure EVs — coined “new energy vehicles” — with advanced technology at a low price-point. These auto companies have been highly subsidized by the Chinese government with a vested interest in their success.
However, they are also starting to see a slowdown in China due to scaled-back consumer purchase incentives and increasing domestic competition.
So Chinese companies have found early success expanding throughout other nations in Asia, in Latin America and parts of Europe as the global EV transition forges ahead to varying degrees outside of the U.S. The war in Iran has also spurred global interest in Chinese EVs as conflict in the Strait of Hormuz impacts the world's crude oil and liquefied natural gas supply.
The Ford venture will expand Geely's European local production footprint — and helps keep Ford workers on the line, experts say.
Ford has lost ground in Europe for years, from selling more than 1 million vehicles across the continent a decade ago, down to under half a million cars last year. While the Valencia factory has annual capacity of 500,000 vehicles, production fell below 100,000 in 2025.
The partnership is sure to reduce pressure on the American auto giant as the two share costs. Ford and Geely already share history; Ford sold Volvo Cars to the Chinese firm in 2010.
“This deal offers a road map for how traditional automakers can survive and thrive in Europe,” said Jessica Caldwell, head of insights at auto research firm Edmunds. “Ford gets the scale and cost efficiencies it needs for its Valencia plant, while Geely gets a direct shortcut around (European Union) tariffs. More broadly, it underscores a major industry shift we’re likely to continue seeing: automakers can no longer go it alone and must collaborate with rivals — Chinese or otherwise — to survive the capital-intensive transition to electrification.”
U.S. automakers, generally, have spent billions of dollars on electrification over the past several years. But the Trump administration has dramatically shifted away from clean vehicle policy, weakening fuel economy rules and auto tailpipe emissions rules.
The administration also eliminated former President Joe Biden's target for half of all new vehicle sales in the U.S. to be electric by 2030, and signed off on Congress’ tax and spending bill that ended federal new and used EV purchase tax credits.
U.S. automakers likely see potential in the European EV market amid uncertain EV sales in the U.S., but may also have to explore more partnerships in order to remain competitive there.
“Like GM before it, Ford has been slowly reducing its reliance on Europe,” said Sam Fiorani, vice president at AutoForecast Solutions. “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.
“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,” Fiorani added. “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.”
Alexa St. John is an Associated Press climate reporter. Follow her on X: @alexa_stjohn. Reach her at ast.john@ap.org.
FILE - A Ford logo is seen on the grille of an unsold vehicle at a Ford dealership, Nov. 2, 2025, in Littleton, Colo. (AP Photo/David Zalubowski, File)
