On Thursday, two major global automotive players — U.S.-based legacy manufacturer Ford and China’s leading new energy vehicle maker Geely Auto — unveiled a landmark joint venture plan to produce low- and zero-emission vehicles at Ford’s existing manufacturing facility in Valencia, Spain. The partnership marks a strategic pivot for both companies, as Ford races to regain its fading foothold in the competitive European auto market and Geely expands its regional production footprint to bypass trade barriers amid a global electric vehicle transition.
Pending final regulatory approval, the new joint venture will be 66.7% owned by Ford, with Geely holding the remaining 33.3% stake. This is not the first collaboration between the two firms: Ford sold its Volvo Cars brand to Geely back in 2010, a transaction that laid early groundwork for today’s deeper cooperation. Geely, which already owns a portfolio of global auto brands including Volvo, Polestar, and Lynk & Co, will bring its expertise in cost-efficient new energy vehicle manufacturing to the partnership.
Five distinct vehicle models are scheduled to roll off the Valencia plant’s assembly lines starting in 2028. Ford will continue production of its popular Kuga plug-in hybrid at the facility, and add a new Bronco SUV to the production lineup. Geely will manufacture two all-electric SUV models at the site, while the two companies will jointly develop a new multi-energy crossover vehicle that accommodates both hybrid and fully electric powertrains. All five new model lines are scheduled to launch production by 2028.
For Ford, the partnership comes at a make-or-break moment for its European operations. A decade ago, Ford sold more than 1 million vehicles annually across Europe; by last year, that number had dropped below 500,000. The Valencia plant, which boasts a total annual production capacity of 500,000 vehicles, only produced fewer than 100,000 units in 2025, leaving massive underutilized capacity. The joint venture will allow Ford to split development and production costs with Geely, bringing the plant’s operations closer to industry cost benchmarks while retaining existing manufacturing jobs at the site.
The collaboration also reflects the shifting dynamics of the global auto industry, driven by rising Chinese new energy vehicle dominance and growing geopolitical friction around EV trade. U.S. tariff policy has effectively blocked Chinese auto manufacturers from full access to the American domestic market, even as Chinese EV makers gain market share across other global regions, from Southeast Asia to Latin America and Europe. Geely’s local production in Spain allows the company to avoid European Union tariffs on imported vehicles, giving it a stronger competitive position in the region.
In a joint statement, the two companies noted the joint venture was structured to address the core new realities of the European market: cutthroat global competition, persistent upward cost pressure, and increasingly strict emissions regulations. The venture resets the Valencia facility to operate at the emerging cost benchmark for the global auto industry, the statement added.
The partnership aligns with Ford’s broader global strategy, even as the company’s leadership has echoed concerns about Chinese EV competition in the U.S. market. During Ford’s first-quarter 2025 earnings call in April, CEO Jim Farley explained the company’s nuanced approach to global partnerships. “We leverage global partnerships and even IP sharing, including with Chinese companies, to grow our business around the world,” Farley said. “Ford continues to be a global company. We want to have the rights to win around the globe, and we need IP and partnerships outside the U.S. to do that. When it comes to the U.S. industry itself, we are extremely protective, as we should be.”
Chinese automakers have rapidly gained global market share in recent years, building high-quality, technologically advanced hybrid and pure electric vehicles at far lower price points than many legacy Western manufacturers, a boost partially supported by decades of targeted government subsidies. While slowing domestic demand in China, driven by reduced consumer purchase incentives and cutthroat domestic competition, has pushed Chinese firms to accelerate global expansion, geopolitical and market shifts have also opened new doors. Ongoing conflict in the Strait of Hormuz has disrupted global crude oil and natural gas supplies, spurring greater consumer demand for affordable electric vehicles worldwide, a trend that has benefited Chinese EV makers.
Industry analysts broadly frame the Ford-Geely partnership as a blueprint for the future of the global auto transition. “This deal offers a road map for how traditional automakers can survive and thrive in Europe,” said Jessica Caldwell, head of insights at automotive research firm Edmunds. “Ford gets the scale and cost efficiencies it needs for its Valencia plant, while Geely gets a direct shortcut around EU 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.”
The deal also comes amid a deeply uncertain policy environment for EV adoption in the U.S. Over the past several years, the current U.S. administration has rolled back many of the clean vehicle policies put in place by the previous administration, weakening corporate average fuel economy rules and tailpipe emissions standards, eliminating the previous target of 50% electric new vehicle sales by 2030, and allowing federal tax credits for new and used EV purchases to expire. This policy uncertainty has led many U.S. automakers to view the European EV market as a more stable growth opportunity, even as it requires new cooperative models to remain competitive.
Sam Fiorani, vice president at AutoForecast Solutions, noted that Ford had already been steadily reducing its exposure to the European market for years, much like its domestic rival General Motors. “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 explained. “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.”