Geely to produce electric SUVs at Ford's Spain plant, first EX5 model to roll off line in 2028

LONDON — Geely Auto will build two electric SUVs at Ford's factory in Spain, and the two companies will jointly develop a new model, they announced on Thursday (Jul 23). The move comes as rising Chinese automakers race to utilize underutilised factories of traditional carmakers and get ahead of European local-content rules.

Under a joint venture that will be 66 per cent owned by Ford and 33 per cent by the Chinese firm, the first Geely-brand electric SUVs will roll off the Valencia plant's production line in 2028.

"We have the ability to really load up the facility," Ford's European head Jim Baumbick told Reuters. "That's the goal."

Background of the Partnership

The two automakers had been in talks on a partnership for many months, which were reported by Reuters in February. Executives said that a long relationship dating back to Geely's purchase of Volvo Cars from Ford in 2010 had helped facilitate those discussions.

Such cooperation with an automaker like Geely would likely not be possible in Ford's home market, where a US Senate committee on Wednesday approved legislation to toughen a ban on Chinese automakers entering the US.

Vehicles and Production Plans

Geely Senior Vice President Victor Yang told Reuters that the first electric SUV to be made in Valencia is the EX5, which is already sold in Europe. The other vehicle the Chinese automaker will produce at the plant is still in development.

"We need to rely on strong partners with the right know-how and expertise to support our localisation efforts," Yang said.

This will be Geely Auto's first production facility in Europe.

Strategic Benefits for Both Companies

The deal helps both companies overcome formidable challenges:

• Chinese automakers are racing to find available factory space in Europe ahead of upcoming EU legislation that will include a "Made in Europe" clause, mandating minimum local content in electric vehicles.
• Ford has significant unused factory capacity. Just a decade ago, Ford was Europe's No. 4 automaker with sales of more than 1 million cars. Last year, the company sold just over 426,000 cars and had fallen to eighth place.

Ford has been through several restructurings in Europe and currently only makes its Kuga SUV in Valencia, which has annual production capacity of around 500,000 vehicles. According to data from GlobalData, the factory was operating at just 26 per cent capacity in 2025.

The No. 2 US automaker will start producing its Bronco SUV in Valencia in 2028. Baumbick said bringing in Geely would "leverage it (Valencia) for scale to compete at the right level of cost in Europe." He added that there were no "hard constraints" on how much of the factory's capacity Geely can use.

"From Ford's perspective, this is pragmatic," said Bill Russo, CEO of Shanghai-based advisory firm Automobility. "It reduces fixed cost exposure, keeps the plant alive and effectively monetises excess capacity."

Spain's Appeal for Chinese Automakers

Spain is a popular choice among Chinese automakers because it is Europe's second-largest car-manufacturing country after Germany and has lower labour and energy costs.

• BYD, the world's largest EV maker, has said the country is on its shortlist.
• Leapmotor will make an electric SUV at joint-venture partner Stellantis' factory in Zaragoza.
• Hongqi has been in talks with Stellantis about building cars in one of its Spanish plants.

Joint Development of New Model

In December, Ford said it would develop two small EVs with Renault using the French automaker's technology. Ford and Geely will jointly develop a crossover SUV that will come with different powertrains — fully electric, plug-in hybrid, and an extended-range EV — and start production in 2028.

Chinese automakers lead the world in developing new EVs at great speed and are expanding aggressively outside their home market, the world's largest, where sales have fallen so far this year. — REUTERS