Ford and Chinese automotive company Geely Auto announced plans on Thursday to jointly manufacture low- and zero-emission vehicles at Ford’s Valencia, Spain factory.
The partnership is a bid to reignite Ford’s offerings for the European auto market as the legacy carmaker seeks to compete with the likes of fast-moving Chinese companies that are rapidly dominating auto sales across the globe.
It comes amid challenges for the American electric vehicle market and increasing global geopolitical tensions driven by U.S. tariff policy. In the U.S., policy all but locks Chinese firms out of the market - though American automakers still partner with companies in China for production, and Chinese vehicles are making inroads in North America more broadly.
The joint venture, pending regulatory approval, will be owned two-thirds by Ford and one-third by Geely, which also owns brands such as Volvo, Polestar and more.
The two companies said they will focus on five vehicles.
Under the partnership, Ford plans to continue production of the Ford Kuga plug-in hybrid vehicle, as well as a new Bronco SUV, production for which will begin in 2028. Geely plans to make two electric SUVs at the plant, the first of which is also scheduled to begin production in 2028.
The automakers said they will also jointly develop a new “multi-energy” crossover model to arrive in 2028.
“The joint venture addresses the new realities of the European market - intense global competition, relentless cost pressure and tightening regulation - resetting Valencia to build at the industry’s emerging cost benchmark,” a release from the two companies said.
Chinese firms are gaining ground and expanding
Chinese automakers have been gaining momentum in recent years as they produce high-quality and efficient hybrid and pure EVs - coined “new energy vehicles” - with advanced technology at a low price-point. These auto companies have been highly subsidized by the Chinese government with a vested interest in their success.
However, they are also starting to see a slowdown in China due to scaled-back consumer purchase incentives and increasing domestic competition.
So Chinese companies have found early success expanding throughout other nations in Asia, in Latin America and parts of Europe as the global EV transition forges ahead to varying degrees outside of the U.S. The war in Iran has also spurred global interest in Chinese EVs as conflict in the Strait of Hormuz impacts the world’s crude oil and liquefied natural gas supply.
Ford’s facing a critical moment
Ford, meanwhile, has been losing ground in Europe for years, from selling more than 1 million vehicles across the continent a decade ago, down to under half a million cars last year.
The partnership is sure to reduce pressure on the American auto giant as the two share costs. Ford and Geely already share history; Ford sold Volvo Cars to the Chinese firm in 2010.
U.S. automakers, generally, have spent billions of dollars on electrification over the past several years. But the Trump administration has dramatically shifted away from clean vehicle policy, weakening fuel economy rules and auto tailpipe emissions rules.
The administration also eliminated former President Joe Biden’s target for half of all new vehicle sales in the U.S. to be electric by 2030, and signed off on Congress’ tax and spending bill that ended federal new and used EV purchase tax credits.
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Alexa St. John is an Associated Press climate reporter. Follow her on X: @alexa_stjohn. Reach her at ast.john@ap.org.
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