Ford and China's Geely are reportedly nearing a landmark agreement where Geely would acquire a section of Ford's Valencia plant in Spain. This move would allow Geely to manufacture electric vehicles (EVs) within the European Union, effectively bypassing the significant tariffs of up to 37.6% that the EU has imposed on Chinese-made EV imports. Geely's definitive tariff rate is currently 18.8% for China-built electric cars. The proposed deal focuses on Geely taking over Body 3, an assembly hall that previously produced models like the Mondeo, Galaxy, and S-Max, and has been largely unused since 2023.
For Ford, the sale of this underutilized part of its Valencia facility offers several benefits. It would provide a substantial cash injection for Ford's European division, which has been experiencing declining sales. Furthermore, it helps Ford reduce fixed costs and safeguard employment at the Almussafes plant, which currently operates well below its maximum annual capacity of 300,000 to 400,000 units, with only the Kuga SUV being produced there. The arrangement could also involve Geely building a Ford-badged model at the same facility using Geely's modular GEA platform.
Geely, which owns brands such as Volvo, Polestar, and Lotus, aims to establish an autonomous manufacturing base in Europe. This would grant it direct access to the European market and allow it to produce cars based on its GEA platform, which supports both electric and plug-in hybrid powertrains. Spanish trade publications indicate that the deal is highly advanced, with Geely already contacting suppliers in the region. The initial production for Geely is expected to be a compact electric crossover, possibly the Galaxy EX2, destined for markets like the UK. The agreement is anticipated to be formally announced during a visit by Spanish Prime Minister Pedro Sanchez and Ford Europe President Jim Baumbick to the Almussafes plant.
