Ford Motor and China’s Geely have agreed to establish a joint venture to manufacture electric vehicles at Ford’s assembly plant in Valencia, Spain, deepening a long-standing partnership at a time when geopolitical tensions are increasingly reshaping the global automotive industry.
The agreement, announced on Thursday, will see Geely manufacture electric vehicles at Ford’s Spanish facility under a new manufacturing venture that combines the U.S. automaker’s established European production network with the Chinese company’s growing expertise in electric vehicle technology.
Subject to regulatory approvals, the joint venture is expected to begin operations in the first half of 2027, with the first vehicles scheduled to roll off the production line in 2028. In the interim, the Valencia plant will continue producing the Ford Kuga sport utility vehicle.
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Ford will retain a controlling 66% stake in the venture, while Geely will own the remaining 34%, allowing the U.S. automaker to maintain operational control while leveraging Geely’s technological capabilities and manufacturing efficiencies.
The partnership comes after months of negotiations and follows a pattern of other legacy automakers seeking alliances with Chinese manufacturers as competition in the global electric vehicle market intensifies.
Chinese automakers have rapidly emerged as global leaders in EV production, benefiting from years of government support, vertically integrated battery supply chains and lower manufacturing costs. Companies such as Geely, BYD and SAIC have also made significant advances in software integration, battery technology and vehicle development speed, areas where many Western automakers are still working to narrow the gap.
The collaboration offers an opportunity to accelerate Ford’s European electrification strategy while potentially reducing production costs in a competitive market.
Chief Executive Jim Farley has repeatedly acknowledged the competitive strengths of Chinese automakers, praising both the quality of their products and their ability to bring new models to market more quickly than many Western rivals. He has noted that strategic partnerships will play an important role in helping Ford compete globally during the industry’s transition from internal combustion engines to electric vehicles.
The companies’ relationship dates back more than a decade.
In 2010, Ford sold Volvo Cars to Geely, a transaction that transformed the Chinese company into a major global automotive player. Since then, Geely has expanded into one of the world’s largest automotive groups, with holdings that include Volvo Cars, Polestar, Lotus, Zeekr, Lynk & Co and several other brands.
The Valencia venture further strengthens that relationship while highlighting how commercial considerations continue to drive collaboration between Western and Chinese manufacturers despite growing geopolitical friction.
The US Auto Bill Targeting Chinese Companies
The announcement came just one day after the U.S. Senate Commerce Committee approved bipartisan legislation designed to tighten restrictions on Chinese automakers operating in the United States.
The proposed Motor Vehicle Modernization Act of 2026 seeks to strengthen barriers against Chinese-linked vehicle manufacturers and connected vehicle technologies over national security concerns. Lawmakers say that modern connected vehicles can collect sensitive information through cameras, sensors, GPS systems and wireless communications that could potentially be accessed by foreign adversaries.
Although the legislation is primarily aimed at limiting Chinese automotive influence in the U.S. market, it illustrates the increasingly difficult environment in which multinational automakers are operating. If enacted in its current form, the bill would not directly affect the Ford-Geely joint venture because the vehicles will be manufactured in Spain for the European market rather than the United States. Ford also holds a controlling 66% stake in the venture, reducing the likelihood that it would fall within the legislation’s ownership restrictions.
However, the broader political climate created by the legislation could still have important implications for the partnership.
Some analysts believe that any future attempt to export vehicles or key technologies from the joint venture into the United States could face heightened regulatory scrutiny. U.S. authorities have been examining Chinese participation in connected vehicle technology, software platforms, battery systems and supply chains, meaning products developed through the partnership could encounter additional compliance requirements if they are intended for the American market.
The legislation also underpins Washington’s aim of reducing dependence on Chinese technology in strategically important industries. That policy direction could influence future investment decisions by U.S. automakers, particularly where Chinese partners are involved in vehicle software, artificial intelligence, autonomous driving systems or battery production.
For Ford, the joint venture is also a response to mounting pressure in Europe.
Chinese manufacturers have rapidly expanded across the continent by offering competitively priced electric vehicles equipped with advanced digital features and long-range battery technology. Establishing production within Europe enables Geely to strengthen its regional manufacturing presence while helping Ford preserve production capacity at one of its key European plants.
Producing vehicles inside the European Union may also reduce exposure to trade barriers affecting imported Chinese-made EVs, although regulators will likely continue monitoring ownership structures and supply chains as Europe seeks to balance industrial competitiveness with strategic autonomy.
The Valencia facility itself occupies an important place in Ford’s European manufacturing network. Converting part of the plant to electric vehicle production helps secure its long-term future as demand for gasoline-powered vehicles gradually declines under Europe’s tightening emissions standards and broader transition toward zero-emission transportation.
The agreement also highlights a growing divide in how major economies are approaching China’s automotive rise.
While Washington is increasingly relying on investment restrictions, national security reviews and tighter regulations to limit Chinese participation in its automotive sector, European manufacturers have largely continued to pursue commercial partnerships where they see technological or economic advantages. That reveals Europe’s dual objective of protecting strategic industries while maintaining access to Chinese expertise and investment.
Industry analysts expect additional collaborations between Western and Chinese automakers as the transition to electric mobility accelerates. Developing competitive EV platforms requires substantial investment in batteries, software, semiconductors and advanced manufacturing, making partnerships an attractive way to reduce costs and shorten development timelines.