Ford, Geely May Team Up To Build Cars In Europe

Ford and China’s Geely Auto are talking about a possible tie-up that could see Geely cars built at Ford’s underused factories in Europe, Reuters has reported. The talks are still early and nothing is confirmed yet, but they say a lot about how tough the car business has become especially in Europe, where EV sales aren’t growing as fast as expected.

Ford admitted the conversations are happening, but stopped short of committing to any deal.

“We have discussions with lots of companies all the time on a variety of topics. Sometimes they materialise. Sometimes they don’t," the company said.

Ford has factories in Europe that aren’t being fully used, while Geely wants to expand outside China without getting hit by heavy European Union tariffs on China-made EVs. If Geely builds cars locally using Ford’s plants, it could be a win-win.

Right now, Ford’s European factories can produce around 700,000 vehicles a year, but are expected to run at just about 23% capacity by 2026. Sales of models like the Focus have ended, the Kuga is slowing, and newer EVs like the Explorer and Capri haven’t taken off the way Ford hoped.

“Honestly, nobody else is lining up to buy that factory space,” said Sam Fiorani, vice president at AutoForecast Solutions. “So this kind of partnership makes sense for both sides.”

For Geely, local production would also help avoid the EU’s tariffs on Chinese EVs, which were introduced last year and can go as high as 37.6%. “Building in Europe gets around tariffs,” Fiorani added. “It removes a lot of political noise.”

Chinese carmakers are under pressure to look overseas. China can already build about half the number of cars sold worldwide each year, and competition at home is brutal. Ford CEO Jim Farley has openly called low-cost Chinese EVs an “existential threat” to global automakers.

That said, don’t expect Geely cars to roll into the U.S. through Ford anytime soon. Sources say the talks are strictly about Europe. The U.S. market is off the table due to tariffs and strict rules around Chinese vehicle technology, especially over data and national security concerns.

Still, Ford and Geely do have history. Back in 2010, Geely bought Volvo from Ford, a deal that turned out far better than many expected. Volvo and Polestar are now strong global brands, including in the U.S.

Ford has also been leaning heavily on partnerships lately. In Europe, it already works with Volkswagen on EV platforms and recently struck a deal with Renault to co-develop electric and commercial vehicles. At the same time, Ford plans to cut 4,000 jobs in Europe by 2027 as it narrows its focus.

Whether a deal actually happens is still up in the air. But with slowing EV demand, rising costs and factories sitting idle, carmakers may not have much choice but to start sharing space and risk.

Source: Reuters.