Ford is in talks with China’s Geely about sharing production capacity in Europe. The American automaker is seeking new global partnerships as it undergoes a thorough overhaul of its electric vehicle strategy.
A delegation of Ford executives visited China this week to discuss cooperation opportunities, including the use of Ford’s car assembly plant in Valencia, Spain, according to a source familiar with the situation who spoke on condition of anonymity because the information is not public.
Potential benefit for both parties
Sharing the facility in Valencia could be a win-win for both parties. Such an agreement would allow Geely to avoid European tariffs on the import of electric vehicles produced in China, while Ford would significantly increase the utilization of its factory. As of 2024, the plant will produce only the Ford Kuga SUV, with production likely falling below 100,000 units last year, according to estimates by French consulting firm Inovev. The factory, by comparison, was designed for an annual capacity of 400,000 vehicles.
A Ford representative said that the company is “constantly in talks with many companies on various topics. Sometimes these talks materialize and sometimes they don’t.” A Geely spokesman declined to comment on the situation. The talks were first reported by Reuters.
A costly restructuring of Ford’s electric vehicle strategy has seen the US automaker increasingly turn to some of China’s best-known brands for potential partnerships, despite their chief executive Jim Farley previously called a “colossal strategic threat”. In addition to Geely, Ford has been in talks with other Chinese automakers, including BYD and Xiaomi, according to a recent Financial Times report.
According to a source familiar with the talks, talks between Ford and Geely are focused solely on production and do not include the potential to share technologies, such as autonomous driving systems. It was emphasized that the talks are in the preliminary phase and may not necessarily result in an agreement.
On the other hand, Geely, which controls both Volvo and Lotus in its portfolio, has been trying for some time to achieve better integration within the vast business empire of its billionaire chairman. Li Shufua. Li said last year that his company would stop building new car factories due to severe global overcapacity and would instead focus on using existing facilities within the group or working with partners.