Ford and Geely reach an agreement to manufacture four cars in Valencia

Ford and Geely have reached an important agreement for the plant that the American company has in Almussafes (Valencia). The facilities have been operating at half throttle for a long time but the agreement with Geely is a lifeline for a team that feared for its future.

Here are all the details.

an agreement. Geely and Ford have reached “an agreement to establish a joint venture for Europe at Ford’s production center in Valencia.” To move forward, yes, they remember that the next step is “waiting for the corresponding regulatory authorizations.”

With this agreement, Geely and Ford should share facilities in the first half of 2027 but the first vehicles will not leave the facilities until 2028. This joint venture will be 34% controlled by Geely and 66% by Ford.

What will be manufactured? The press release sent to the media states that the joint venture will bring about “a new generation of low- and zero-emission vehicles destined for European markets.” That is, cars with plug-in hybrid and electric technology will come out of the Valencia plant.

It is also specified that “the joint venture is planned to manufacture two multi-energy vehicles from the Ford brand and two electric models from the Geely brand, starting in 2028” but no further details are offered that point to the names of said vehicles or whether deeper integrations are contemplated.

The possible scenarios. With the information that is confirmed, there are different possibilities:

• Ford and Geely share facilities but do not share models. One line brings out the “Ford multi-energy models” and another “the Geely electric ones.”
• The integration of Ford and Geely is greater because one of the “electrics” of the latter company is an extended range electric, a solution in which a combustion engine is used and that fits within the definition of “electric car” and “multi-energy car.”

What does Ford gain? For years, Ford’s production in Europe has been in clear decline and Almussafes has been operating at half throttle for some time. The possibility of closure has been raised on several occasions, but closing a factory involves a lot of money in layoffs, compensation to suppliers, and leaves facilities for which a buyer must be sought.

Ford had already confirmed that Valencia will manufacture a new Bronco “European style” (that it will have nothing to do with with the one produced in the United States) and a multi-energy Kuga. Despite this, the factory would be released in part because it has the capacity to put half a million vehicles on the road annually.

The American company is going through a bad time in Europe. It already has a agreement with Volkswagen for your mid-size electrics (explorer and Capri) and another with Renault for sister versions of the Renault 5 and the Renault 4. With all that covered, the company did not seem interested in making the necessary investments to produce more cars in Europe.

What does Geely earn? The benefits for Geely are numerous. First, it will have an already built plant that requires money to modernize but which is already built. This will allow them to produce in, they say, a year and a half. It is less time than it takes to obtain permits to build a factory, build it from scratch and start producing.

The second thing is that it buys European land. And with the European soil, a good part of the tariffs that are currently imposed on their cars are eliminated. Especially if we take into account that Geely will manufacture cars and will not assemble them using parts from China. (like Chery does in Barcelona)a solution that the European Union believes not enough to eliminate tariffs.

What does Valencia gain? The opportunity to once again have a factory that increases its production and extends its useful life. When the rumors started Of a possible association of Geely with Ford, the doubt remained as to whether Almussafes was going to be the option chosen in the possible agreement between the companies. And Ford already has a plant capable of manufacturing completely electric models.

However, if both companies do not share assembly lines and only share facilities, Valencia is an excellent opportunity for Geely since it will be able to manufacture at lower costs than in Cologne (Germany) where Ford has its electric car plant. This should result in a more attractive price, greater chances of success in the market and a clearer horizon for the future.

Photo | Geely and Ford

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