Ford has partnered with Chinese automaker Geely to produce two new electric SUVs at its factory in Valencia, Spain. The joint venture, expected to begin operations in early 2027 pending approvals, aims to secure the future of the plant while expanding its production capacity.
New models and factory upgrades
The Valencia facility, which has operated since 1976, currently builds the Ford Kuga but has capacity for up to 500,000 vehicles annually. Under the agreement, Geely will manufacture two electric SUVs there starting in 2028. The same year, Ford plans to introduce a new member of its Bronco family at the plant.
A jointly developed “multi-energy” crossover, capable of running on multiple fuel types, is also slated for production in 2029. The Kuga will continue to be assembled at the site for now, though Ford has already shifted production of its next-generation Fiesta to France.
Cost efficiency and competitive pressures
Ford framed the deal as a response to intensifying competition in Europe’s automotive market. The company cited “tightening regulation, high operating costs, and a new generation of global competitors” as factors reshaping industry benchmarks for manufacturing costs and vehicle technology.
“By pooling production volume, Ford and Geely will maximize the capacity of the Valencia plant, lower the cost of every vehicle built there, and compete at this emerging cost standard,” the company said. The partnership is expected to strengthen the local economy while delivering what Ford called “world-class multi-energy vehicles.”
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Geely, which acquired Volvo from Ford in 2010, was selected over other potential partners for the venture. Alex Nan, vice president of Geely Auto Group, said the collaboration reflects the company’s strategy of “open, collaborative product development” and its commitment to serving European customers.
“We are dedicated to delivering vehicles that European customers will choose on merit: on industry-leading features, on high quality, and on actively contributing to Europe’s green future,” Nan said. “Put simply: we are building cars in Europe, for Europe, alongside a trusted partner.”
The deal does not affect Ford’s existing partnership with Volkswagen, which involves producing electric models like the Explorer and Capri based on VW’s ID.4 and ID.5 platforms. The Valencia plant’s role in Ford’s European operations has evolved over the decades, but the new agreement signals a shift toward shared manufacturing to handle rising costs and regulatory demands.
For Geely, the venture marks another step in its expansion beyond China. The company has steadily increased its footprint in Europe, where demand for affordable electric vehicles continues to grow. The two SUVs slated for Valencia will compete in a segment where price and efficiency are becoming as critical as performance.
