Ford and Geely form JV at Valencia plant to produce five models

Mark Nichols Thu, July 23, 2026 at 10:56 AM PDT 4 min read

The Gist

Ford and Geely are forming a manufacturing joint venture at Ford's Valencia plant, giving the Chinese automaker a 34% stake and Ford the remaining 66%. The goal is to lift production, cut costs, and turn the underused Almussafes factory into a European hub for five models across both brands. Ford gets a lifeline for its struggling European business. Geely gets local production inside the European Union. Everyone gets to call it cooperation instead of survival with better press materials.

What Happened

Ford and Geely have agreed to create a joint venture around Ford's Valencia plant in Almussafes, Spain. Ford will own 66% of the business, while Geely will hold 34%. Local Spanish reports said Geely will pay about €221 million (approximately $251 million), valuing the plant at roughly €650 million.

The factory's current workforce will transfer to the new joint venture. Geely said it will rely on local labor rather than bringing workers from China, and future hiring is expected to come from the local workforce.

The two companies plan to produce five vehicles at the plant:

• Ford will continue making the Kuga, add the latest Bronco family model, and develop a new multi-energy crossover.
• Geely will produce two electric SUVs.

One Geely model is expected to start production in 2029, while Ford's new crossover is planned for late 2028.

The partnership aims to bring the plant back toward full use. Almussafes has an annual capacity of about 500,000 vehicles but has recently been operating at around 30%, with production far below past peaks.

Ford Europe boss Jim Baumbick said the partnership would allow Ford to compete at a "completely new level of cost" in Europe. Geely executive Victor Young said the Chinese group wants to become a long-term local player, not just export cars from China.

Why It Matters

This is what Europe's car industry looks like when everyone finally admits the old model is not working.

Ford's Valencia plant was once a symbol of European manufacturing strength. Production once topped 400,000 vehicles a year. But the factory has lost models, cut shifts, and lived with years of uncertainty. By 2025, output had fallen below 100,000 vehicles. Thousands of jobs depended on whether Ford could find new work for a plant too big for its current product lineup.

Geely gives Ford that work.

For Ford, the logic is harsh but clear. Its European business has been losing share and struggling with costs. Its E.U. market share fell to 2.2% in June from 2.9% a year earlier, leaving it behind Chinese players including BYD, Geely, and SAIC's MG. Competing with Chinese brands on price, software, and electrification is hard enough. Competing while running half-empty factories is worse.

The joint venture helps solve the factory problem:

• More models mean more volume.
• More volume means better fixed-cost absorption.
• Better fixed-cost absorption means Ford has a shot at making European production less painful.

It also gives Ford access to Geely's speed and EV know-how. Chinese automakers have become extremely good at developing affordable electric and hybrid vehicles quickly. European and U.S. legacy carmakers may not love admitting it, but they increasingly need that capability.

Geely gets something equally valuable: a manufacturing base inside the European Union.

Brussels is pushing Chinese carmakers to localize production, share technology, and build more of their European supply chains inside Europe. Tariffs and local content rules make simple exporting from China less attractive. A Spanish factory gives Geely a European foothold, political cover, and faster access to customers.

Similar deals are popping up elsewhere. Stellantis has worked with Dongfeng. Nissan is exploring partnerships of its own.