Ford and Geely Explore Manufacturing and Technology Partnership Amid Rising Auto Costs

Summary

Ford Motor Co. and China’s Geely Automobile Holdings are in ongoing discussions about a potential strategic partnership that could see Geely use Ford’s European factory capacity and both companies collaborating on advanced vehicle technologies, including automated driving and connected software systems. The talks reflect mounting pressure in the auto industry to share the high costs of electric vehicles (EVs), software-defined platforms, and autonomous driving technologies. Any agreement involving the U.S. market could face regulatory scrutiny due to national security concerns.

Talks Cover Manufacturing Capacity in Europe

Multiple people familiar with the discussions say that Geely may utilise Ford’s European factory space to produce vehicles for the regional market. This aspect of the negotiations is seen as more advanced than other elements of the talks. The likely facility under consideration is Ford’s Valencia plant in Spain, although this has not been officially confirmed by either company.

Such an arrangement would allow Geely to avoid the European Union’s tariffs on China-built EVs — which were introduced in 2024 amid concerns about state subsidies and competitive imbalances — by assembling vehicles inside the EU. This could improve Geely’s competitiveness in European markets and optimize Ford’s factory utilisation during its shift toward electrification.

Technology Sharing Also Discussed

Beyond manufacturing, Ford and Geely have also discussed frameworks for collaboration on advanced automotive technologies, including connected-car systems and automated driving capabilities. These areas are seen as critical for automakers striving to compete with both technology-centred rivals and fast-maturing Chinese OEMs.

Ford CEO Jim Farley has acknowledged that Western manufacturers are under pressure to innovate in digital cabin experiences, software integration and EV technology — areas where Chinese peers have made rapid progress and where Farley has spoken publicly about the need to improve.

Talks Ongoing, No Deal Yet

The discussions have been underway for months and have intensified recently, with Ford delegations travelling to China and high-level meetings taking place in the United States, according to sources. However, there is no indication that a final agreement has been reached, and the full scope — including whether any cooperation will extend to the U.S. market — remains unclear.

Geely has declined to comment publicly on the talks. Ford said it regularly engages in discussions with many companies, but that such discussions do not always result in formal deals.

Geopolitical and Regulatory Sensitivities

Any licensing, technology-sharing or use of Chinese automotive software systems in vehicles sold in the United States could attract heightened regulatory scrutiny. U.S. policymakers, both in the Biden and Trump administrations, have tightened rules around data, connected vehicle hardware and software from Chinese firms due to national security concerns — potentially complicating deeper collaboration if U.S. sales are involved.

Europe, on the other hand, generally presents fewer political barriers to manufacturing cooperation, which may explain why European production talks appear more advanced.

Geely’s Global Partnership Model

A potential tie-up with Ford would align with Geely’s broader global partnership strategy. The Chinese automaker has previously forged joint manufacturing arrangements with Renault in markets including South Korea and Brazil, leveraging partners’ facilities and sales networks while deploying Geely-developed platforms.

Geely also owns international mobility brands such as Volvo Cars, Polestar and Lotus, and reported strong sales growth in 2025 — reinforcing its position among China’s largest automakers.

Industry Trend Toward Alliances

The talks between Ford and Geely reflect a wider industry trend where automakers — challenged by soaring development costs for EVs, software systems, and autonomy — are increasingly opting to share platforms, manufacturing capacity and technology through alliances and partnerships. Ford itself recently expanded cooperation in Europe with Renault, focusing on EV production.

FAQs

Q1. What are Ford and Geely discussing?

A potential partnership covering vehicle production in Europe and shared automotive technologies, including connected and automated driving systems.

Q2. Where could vehicles be built under the partnership?

Ford’s Valencia plant in Spain is considered the most likely location for Geely to produce vehicles for the European market.

Q3. Why would Geely build cars in Europe instead of China?

Local production could help Geely avoid EU tariffs on Chinese-made EVs and improve access to European buyers.

Q4. What would Ford gain from the partnership?

Potential access to Geely’s EV platforms, software expertise and connected tech, as well as better factory utilisation amid restructuring.

Q5. Would this partnership include the U.S. market?

That remains unclear; any deep cooperation involving Chinese tech in the U.S. is likely to face regulatory and political scrutiny.

Q6. Is a deal finalised?

No. Talks are ongoing, and there is no confirmed agreement yet.

Q7. Why are automakers forming more partnerships now?

High costs tied to EV development, software systems and autonomy are prompting carmakers to share platforms, technology and production capacity.