Ford and Geely to Produce Electric Vehicles in Spain

What happened?

On July 24, 2026, Ford and Chinese giant Geely announced a joint venture to manufacture electric vehicles at Ford's plant in Valencia, Spain. According to The Next Web, Ford will own 66% of the joint venture and Geely 34%. Subject to regulatory approvals from the European Union and Spanish authorities, operations will begin in the first half of 2027, and the first vehicles will roll off the production line in 2028. The Valencia plant, which currently produces models like the Ford Transit and Kuga, will be transformed to assemble next-generation electric vehicles, leveraging Geely's modular platforms (such as the Sustainable Experience Architecture, SEA) and Ford's manufacturing expertise. Although specific models have not been revealed, the range is expected to include both passenger vehicles and light commercial vehicles targeting the European market.

This is not the first collaboration between the two groups: Ford had already licensed Geely's SEA platform for an electric model in China in 2023. However, this joint venture represents a much deeper step, establishing joint production in Europe. The estimated investment is around 2 billion euros, according to sources close to the negotiations, although the companies have not officially confirmed the figure.

Why is it important?

This alliance is key for several reasons. First, it consolidates Spain as a hub for electric vehicle manufacturing in Europe, attracting foreign investment at a time when the country seeks to diversify its economy and reduce dependence on tourism. The Valencia plant, which employs about 6,000 people, will secure its long-term viability, although a restructuring of the workforce toward more technological profiles is expected. Second, it allows Ford to share EV development and production costs, reducing its financial risk. Ford has allocated $50 billion to electrification by 2030, but its EV margins have been negative; this alliance could cut production costs by up to 30% according to analyst estimates. Third, Geely gains a production base in the EU, avoiding tariffs (currently 10% for vehicles imported from China) and complying with local content regulations, such as the 55% local content requirement to access tax benefits. The collaboration combines Ford's industrial scale with Geely's battery and electric platform technology, which already produces solid-state batteries in its Chinese factories.

Moreover, the European regulatory context is crucial: the EU has proposed tariffs of up to 25% on Chinese electric vehicles to protect the local industry, making on-site production strategic. Geely, which already owns brands like Volvo, Polestar, and Lotus, strengthens its presence in Europe, where it already has plants in Sweden (Volvo) and Belgium (Volvo), but none with the high capacity of Valencia.

Market consequences

The joint venture could pressure other traditional manufacturers to seek similar alliances to compete on costs. For example, Volkswagen already collaborates with Xpeng in China, and Stellantis has sought Chinese partners for battery technology. Local EV production in Spain could accelerate electric vehicle adoption in Southern Europe, where penetration rates are lower (12% in Spain vs. 25% in Germany). For workers at the Valencia plant, the alliance secures long-term jobs, although with possible restructuring: the workforce is expected to be reduced by 10% through early retirements and relocations, but new positions in R&D and software will be created. Geely, which already owns brands like Volvo and Polestar, strengthens its presence in Europe, where it aims to sell 500,000 vehicles annually by 2030.

In the stock market, Ford shares rose 2.3% on the day of the announcement, while Geely (listed in Hong Kong) fell 1.1% due to the investment cost. Bloomberg Intelligence analysts believe the alliance could save Ford between $1 billion and $2 billion in development costs over the next five years.

What readers should know

The joint venture does not imply a merger of the companies, but rather a collaboration limited to the Valencia plant. Specific models have not yet been announced, but they are expected to combine Geely platforms (such as SEA or the solid-state battery platform) with Ford design and distribution. Regulatory approvals from the EU and Spain are a critical step; any delay could postpone production until 2029. Additionally, the alliance reflects the trend of consolidation in the automotive industry to share the high costs of electrification, which require investments of $10 billion per platform. There are also geopolitical risks: the EU could tighten conditions for joint ventures with Chinese companies, as it did with PSA's acquisition of Opel. Finally, readers should watch the evolution of tariffs on Chinese electric vehicles, which could alter the economic equation of the alliance.