Discussions involve the use of Ford's production facilities in Europe and potential technology exchange. This approach reflects an effort to adapt to changes in the global automotive market and the strengthening positions of Chinese brands.
Reasons for Seeking a Partner
Ford's leadership acknowledges that the company lags behind Chinese manufacturers in electric vehicles, software, and driver assistance systems. Competitors from China implement new digital solutions faster and scale production of electric models more efficiently. Against this backdrop, Ford increasingly views collaboration as a way to accelerate its own development.
According to industry sources, negotiations between Ford and Geely are underway in several directions. Discussions on production cooperation have advanced further than talks on joint technology use.
European Factories and Tariff Policies
A key factor is the European Union's trade policy. The introduction of additional tariffs on electric vehicles produced in China has significantly complicated their direct export to Europe. At the same time, vehicles manufactured within the EU are not subject to these restrictions.
In this context, Geely shows interest in Ford's plant in Valencia, Spain. The facility is designed to produce up to 450,000 vehicles per year but is currently only partially loaded. It produces only the Kuga model, with sales volumes of about 130,000 units per year. The remaining capacity could be used for Geely vehicles.
Potential Benefits for Both Sides
For Geely, localizing production in Europe provides access to the EU market without additional tariffs and enhances logistics flexibility. The group already has experience with similar strategies, using partners' production sites in other regions worldwide.
For Ford, the main value of the collaboration may lie in technology exchange. Chinese brands have made significant advances in connected services, electric drivetrains, and automated control systems in recent years. These solutions could help Ford accelerate its model lineup updates.
U.S. Market and Restrictions
The U.S. market remains a separate issue. Electric vehicles produced in Europe face a tariff of about 15 percent in the U.S., while those from China exceed 100 percent. This makes European production potentially advantageous for overseas supplies as well.
However, regulatory barriers exist. The U.S. has restrictions on the use of connected vehicle technologies linked to Chinese and Russian developments. Even with local assembly, such systems may be prohibited, complicating direct technology transfer.
Conclusion
Negotiations between Ford and Geely reflect a broader process of restructuring in the global automotive industry. The use of European factories and selective cooperation could provide tactical advantages to both sides. Further development of the initiative will depend on regulatory conditions and the companies' readiness for deeper integration.
