Ford-Geely Project Targets Production of 5 Models in Spain Starting in 2028
Key Facts
Geely Auto and Ford announced an agreement on July 23 to establish a joint manufacturing venture at Ford’s plant in Valencia, Spain, enabling vehicles carrying both companies’ brands to be produced in Europe. The announced program includes three Ford models with multiple power sources and two electric models from Geely, with production set to begin in 2028. Ford will hold a 66% stake in the new entity, compared with 34% for Geely, according to a statement from the Chinese company. The project comes as European trade policy moves to regulate imports of Chinese-made hybrid cars. But the import cap discussed in reports applies to hybrids, while the Valencia plan includes Geely electric cars and Ford vehicles with multiple power sources.
The plan has two timelines: the venture is to begin operations in the first half of 2027, subject to regulatory approvals, and the first new vehicles are to roll off the production line in 2028. Geely said the Valencia plant has potential annual capacity of about 500,000 units; that is the site’s available capacity, not a stated production figure for the venture. Production is set to include five models, split between Ford vehicles with multiple power sources and Geely electric cars. The announcement did not specify actual production volumes for each model or an annual unit schedule. The project thus links an existing Ford facility with a joint manufacturing plan to bring products from both companies to the European market.
The European trade arrangement comes against a backdrop of rising Chinese hybrid imports. China’s exports of hybrid cars to the European Union’s 27 member states were worth about $7.5 billion in the first half of 2026, up from $2.5 billion in the same period of 2025, according to Reuters. The European Commission imposed additional tariffs on Chinese-made electric vehicles in 2024, while plug-in hybrids were exempt from those additional duties. European officials told The Associated Press that the agreement sets an annual quota of 350,000 Chinese-made hybrid cars, and that coordination on monitoring could begin in December. The cap excludes cars produced by Chinese companies inside Europe, according to the European officials.
Reuters reported in October that Chinese hybrid exports to the European Union were on track to reach 800,000 cars during 2026, and that Chinese-made cars accounted for about 12% of the market at the time. The agency said the safeguard measure would also apply to the EU’s other trading partners and would last four years. According to an estimate by a trade adviser cited by Reuters Breakingviews, China’s quota could rise 6% annually after the first year, while quotas for other partners were expected to be announced before December, with details of their allocation still unresolved. A senior European Commission official said dialogue with China had produced results, but added: "Dialogue alone does not seem sufficient to address the problem of unsustainable structural imbalances." These measures remain tied to hybrid imports, while the Valencia project involves local manufacturing of vehicles from both companies.
Geely’s figures reflect the expansion of its overseas business before the Valencia project was announced: sales outside China reached 474,228 vehicles in the first half of 2026, up 158% year on year, the company said. Analysts cited by Reuters also said import restrictions could strengthen Chinese automakers’ incentive to manufacture in Europe, as producing closer to customers becomes more attractive when imports are constrained. Separately, Changan’s chairman said at the Paris Motor Show on October 12 that he was not too concerned about the agreement and that the company planned to begin producing its cars in the region in early 2027. Chinese automakers’ shares moved unevenly that day: BYD fell 1.8%, while Chery and SAIC rose 1.4% and 0.5%, respectively. Ford shares closed at $12.28 on November 10, compared with a close of $12.52 on November 9, according to EL7 data.