Ford and Geely move closer to a major EV deal in Spain

07 May 2026

Ford has a huge factory in Valencia, Spain, but it has a problem. The site is underutilized and does not produce enough vehicles to stay profitable. To fix this, Ford is in very advanced talks with Geely, the large Chinese company that owns Volvo. The two companies want to strike a deal that would change how the Valencia plant operates. Reports suggest Geely may buy a specific part of the factory to build its own electric cars.

According to the Spanish news outlet La Tribuna de Automoción, Geely is interested in the "Body 3" assembly lines. These lines are where the main structure of a vehicle is put together. Geely has an internal name for this project, calling it "135." While the deal is not signed yet, Geely has already started talking to local parts suppliers in the region, suggesting the company is serious about moving into the Spanish facility soon.

The car Geely plans to build is likely the EX2. This is a small electric hatchback that has already seen great success - it was the top-selling car in China last year. For the European market, Geely will likely change the name to the E2. It is designed to be an affordable option for people who want to switch to electric cars without spending a fortune.

Geely uses the GEA platform for this new EV - it stands for Global Intelligent Electric Architecture. This platform allows the company to build different types of cars on the same base. The GEA platform can support regular hybrids, plug-in hybrids, and full EVs.

There is a very interesting twist to this potential deal. Ford might not just provide the space for Geely. Sources say Ford might use Geely's GEA platform to build its own Ford-branded car. Developing a brand-new car platform costs billions of dollars and takes many years. By using Geely's technology, Ford could launch a new model much faster and for a much lower price.

This strategy is part of a bigger plan for Ford in Europe. The American automaker is already leaning on other companies for help - the electric Ford Explorer and the new Capri use Volkswagen's MEB platform. Ford also partnered with Renault to build two small electric cars. It seems Ford has decided that sharing the bill with rivals is better than trying to do everything alone.

It's no secret that Ford is worried about the rise of Chinese brands like BYD. These companies make high-quality EVs for much lower prices than Western brands. Ford CEO Jim Farley has been very honest about this. He said the company is in a "fight for its life" and called Chinese competition an "existential threat." Working with Geely might be the only way for Ford to stay competitive in the European market.

Geely has its own reasons for wanting a factory in Spain. In 2024, the European Union placed a big tax on cars imported from China. Geely faces an 18.8% tariff on every car it ships from its home country. By building the E2 in Valencia, Geely can avoid this tax entirely, making the cars much cheaper for European buyers and helping Geely grow its footprint in the region.

The deal might go beyond just nuts and bolts. Ford and Geely are also discussing how to share smart technology. This includes automated driving systems and advanced safety tools that help drivers stay in their lanes. Sharing the software for these systems helps both companies save money on research. Ford spokespeople say nothing is final yet, but they admit they are constantly talking to other companies about new opportunities.

Even as Ford looks for partners, it is still working on its own secret projects. The company is developing a new "Universal EV" platform that will eventually underpin a lineup of small, affordable electric cars, and selling off the underused parts of the Valencia plant provides Ford with the cash it needs to finish these projects.

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