Ford and Geely have signed an agreement in Spain for Geely’s wholly-owned subsidiary, Geely SPV, to pay USD $256 million to acquire a 34% stake in a Spanish vehicle manufacturing company held by Ford NL. Ford retains the remaining 66%; after the deal closes, the company will operate as a joint venture at Ford’s Valencia plant, producing passenger cars under contract.
The Valencia plant opened in 1976, and was once Ford’s largest production base outside the United States. It has built more than 11 million vehicles to date and has a designed annual capacity of about 500,000 units, making it one of Europe’s biggest car factories.
However, in 2024 Ford stopped producing several fuel-powered models there, including the Mondeo, S-MAX, and Galaxy, leaving only the Kuga on one production line. In 2025 output fell below 100,000 units.
The joint venture is scheduled to start operations in Q1 2027, with the first new model rolling off the line in 2028. The two sides plan to produce five models at the plant: Ford will continue building the Kuga. It plans to launch a new compact rugged SUV under the Bronco family in 2028 and introduce an all-new Ford-brand crossover designed by Ford and co-developed with Geely. At the same time, Geely plans to produce two new-energy SUVs.
A Ford spokesman said the partnership is expected to unlock the plant’s full capacity, build a low-cost and efficient manufacturing system, and build cars in Europe for European customers. For Ford, selling part of the capacity means cutting fixed costs while keeping local production ability.
Source: Sina Finance Read The Article
PSR Analysis. This partnership signals a major shift in China’s EV exports to Europe—from shipping finished cars to building them locally. Rather than constructing a new plant from scratch, Geely is taking a 34% stake in Ford’s Valencia factory, bypassing EU tariffs and local-content requirements in a single move. The light-asset model cuts capital outlay, shortens lead times, and reduces policy risk. As more Chinese brands face the same trade barriers, this capacity-sharing approach could replace the old export model with full-chain local production, fundamentally reshaping how Chinese EVs enter the European market.
For Geely, the deal advances its globalization strategy from buying assets to sharing resources. Sixteen years after the full Volvo acquisition, Geely is now spending just USD $256 million for a 34%, non-consolidated stake—gaining a world-class European plant at minimal cost and risk while keeping full brand independence.
That matches its current growth pace: overseas sales jumped 158% in the first half of 2026. By turning the Valencia factory into its European production hub, Geely not only extends its global reach but also pioneers a new model of manufacturing partnership rather than traditional brand buyouts.
The Valencia plant also gives Geely a European base for smart-driving development. Although the joint venture is strictly a contract manufacturer with no R&D or sales role, Geely keeps full control over the technology and intelligent features in its own EV models and the co-developed Crossover.
Building cars in Europe means collecting real-world data on local roads, traffic laws, and driver behavior—feedback that directly improves its autonomous-driving algorithms for the region. Daily collaboration with Ford on the factory floor further opens channels for sharing electric-platform and supply-chain expertise. Over time, this helps Geely build a smart-vehicle ecosystem precisely tailored to European conditions while maintaining full technological sovereignty. PSR
Jack Hao is Senior Research Manager – China
