VALENCIA, SPAIN — Ford and Geely Auto announced plans on July 23 to form a joint venture to manufacture vehicles at Ford's Valencia factory in Spain. The joint venture will be owned 66% by Ford and 34% by Geely.

The agreement is pending regulatory approval and is scheduled to begin operations in the first half of 2027. Geely Auto, an automobile manufacturer and subsidiary of Geely Holdings, will pay approximately €221 million (about $251 million) for its stake in the enterprise. The deal values the Valencia plant at roughly €650 million.

The joint venture will focus on producing five vehicles. Ford plans to continue production of the Ford Kuga plug-in hybrid vehicle at the Valencia plant and begin production of a new Bronco SUV in 2028. Geely plans to produce two electric SUVs at the facility, with the first scheduled to begin production in 2028 and a second model expected to start in 2029.

The companies will also jointly develop a new multi-energy crossover model. The new Ford multi-energy crossover is planned to arrive in late 2028. The current workforce at the Valencia factory will transfer to the new joint venture. Geely stated it will rely on local labor rather than bringing workers from China.

Valencia is a municipality in Spain and the capital city of the Valencian Community. The factory has an annual production capacity of 500,000 vehicles, though it has recently been operating at around 30% of its capacity. Production at the plant once topped 400,000 vehicles a year but fell below 100,000 vehicles in 2025.

A statement from the companies said 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. Ford previously sold more than 1 million vehicles across Europe a decade ago, but sold under half a million cars in Europe last year.

Ford CEO Jim Farley outlined the strategy for global collaboration in comments made on April 30. "We leverage global partnerships and even IP (intellectual property) sharing, including with the Chinese (companies), to grow our business around the world," Farley said. He added that Ford maintains a distinction between its international and domestic operations.

"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," Farley said.

Geely Auto's overseas sales in the first half of 2026 reached 474,228 vehicles, representing a 158% year-on-year increase, according to a July 23 announcement by the automaker. Jessica Caldwell, Head of Insights at Edmunds, identified the strategic benefits for both parties. "This deal offers a road map for how traditional automakers can survive and thrive in Europe. Ford gets the scale and cost efficiencies it needs for its Valencia plant, while Geely gets a direct shortcut around (European Union) tariffs," Caldwell said. She noted the broader implications for the automotive sector.

Caldwell said the partnership reflects a major industry shift in which automakers increasingly collaborate with rivals — including Chinese companies — to manage the capital-intensive transition to electrification. Chinese automakers have been highly subsidized by the Chinese government, and Geely owns brands such as Volvo and Polestar.

Sam Fiorani, Vice President at AutoForecast Solutions, viewed the move as part of a longer trend. "Like GM before it, Ford has been slowly reducing its reliance on Europe," Fiorani said. He noted that the partnership allows Ford to introduce new products without bearing the full development costs of a new platform.

"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 said. Ford sold Volvo Cars to Geely in 2010, establishing a prior collaboration between the automakers.

The joint venture represents a shift in how traditional Western automakers approach the European market as competition from Chinese manufacturers rises. By sharing facility costs and intellectual property, Ford aims to restore volume at an underutilized plant while Geely gains a local production footprint that circumvents European Union tariffs on imported vehicles. The agreement follows a period of declining output at the Valencia factory, which operated at roughly 30% of its capacity in recent years.

This partnership builds on a corporate history that dates to 2010, when Ford sold Volvo Cars to Geely. The current deal expands that relationship into shared vehicle production and development. With Geely's overseas sales rising 158% in the first half of 2026, the collaboration aligns with the Chinese automaker's strategy to become a local player in key markets rather than relying solely on exports. The success of the venture depends on regulatory approval and the ability of both companies to integrate their operations effectively by the target start date in 2027.