Ford is in ‘very advanced’ talks to sell part of EU plant to China’s Geely, but there’s more

Ford is reportedly in “very advanced” talks with Volvo owner, Geely, to sell a portion of its Valencia plant in Spain. The deal may involve a new electric vehicle.

Is Ford selling its Valencia plant to Geely?

According to a report from the Spanish media outlet La Tribuna de Automoción, Volvo’s parent company, Geely, has agreed to buy the Body 3 vehicle assembly lines at its Valencia factory in Spain.

Sources familiar with the matter told La Tribuna de Automoción that Geely is considering building a new vehicle at the facility, codenamed “135” internally.

The vehicle, likely the EX2, will be available with hybrid, plug-in hybrid, and all-electric powertrains based on Geely’s GEA (Global Intelligent Electric Architecture) platform.

However, that’s where things get interesting. The same sources suggest that the deal may involve Geely producing a vehicle for Ford using the same GEA platform. Geely’s EX2, an electric hatchback, was the best-selling car in China last year.

In Europe, it will be rebadged as the E2. The report claims that discussions are “very advanced” and that Geely has already contacted multiple suppliers in the area.

When asked about it, a Ford spokesperson said, “We are constantly in talks with many companies about various topics; sometimes they materialize, sometimes they don’t. Nothing is finalized.”

As part of its restructuring in Europe, Ford is relying heavily on partnerships to cut costs and become more competitive with Chinese EV manufacturers like BYD, which are quickly stealing market share from legacy automakers with lower-priced, and oftentimes more advanced, vehicles.

The electric Ford Explorer and Capri share Volkswagen’s MEB platform with the ID.4 and ID.5. In December, the American automaker announced a partnership with Renault to launch two new affordable Ford-branded EVs based on its Ampere platform, the same one that underpins the Renault 5.

A Reuters report in February claimed the Ford and Geely deal may involve more than just manufacturing space. Several sources said that Ford and Geely held talks about sharing new technology, including automated driving and other advanced driver-assistance systems (ADAS).

Electrek’s Take

CEO Jim Farley has warned several times now that Chinese automakers pose an “existential threat” to Western brands, including Ford.

“We know we’re in a fight for our lives,” Farley said in December after revealing the new partnership with Renault.

Selling a part of its Spain plant, which is underutilized anyway, would give Ford an edge with Geely’s technology and likely much-needed cash as it looks to turn things around in Europe.

Geely would also benefit from the deal as a way to avoid the 18.8% tariff the EU imposed on it in 2024. While Ford is partnering with Chinese automakers in Europe, it’s betting on its new Universal EV platform to compete with them with an upcoming lineup of smaller, more affordable electric vehicles (and we got to tour the secret lab where it’s being developed).