China Has A Plan To Avoid European Tariffs: Team Up With Ford

Ford and Geely are reportedly exploring an industrial partnership focused on one of Ford’s major manufacturing sites in Europe. According to Automotive News Europe, the two automakers are in advanced discussions over a potential agreement that would allow the Chinese group to build vehicles in the European Union using Ford’s facilities.

The talks come as new European trade measures and rising development and manufacturing costs continue to reshape the global auto industry. Ford’s plant in Valencia, Spain, has emerged as the most likely location for the project.

Producing vehicles within the EU would help Geely avoid tariffs on Chinese-built electric vehicles, while allowing Ford to increase utilization at an underused factory.

Valencia As A Strategic Asset For Ford

The Valencia plant is a key pillar of Ford’s European operations. It currently produces the Kuga compact SUV, but output remains well below the site’s designed capacity. Bringing Geely models into the facility could allow Ford to make better use of its existing industrial footprint without the need for major new investment.

For China’s Geely Group—which owns brands like Volvo and Lotus—manufacturing in Valencia would offer a faster route to expanding its presence in Europe.

Geely’s own-brand sales in the region remain relatively limited compared with those of other Chinese automakers that are already more established, making local production an increasingly important step to remain competitive.

EU Tariffs & Shifting Alliances

Europe’s regulatory environment is a key factor behind the discussions. The European Union has imposed additional tariffs on EVs produced in China, citing concerns over state-backed advantages. By assembling vehicles inside the EU, Geely could bypass these measures and improve the price competitiveness of its models.

More broadly, the potential partnership reflects a growing trend among automakers to collaborate in order to share technology, reduce costs, and adapt to a changing market. Ford has previously entered similar arrangements in Europe, while Geely has long favored leveraging existing facilities rather than building new plants. If finalized, a deal centered on Valencia could serve as a clear example of how the automotive industry is rethinking production strategies across Europe.

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Motor1’s Take: Ford and Geely’s potential partnership shows how Europe’s trade rules and rising costs are reshaping the auto industry. Local production would let Geely avoid EU EV tariffs while helping Ford better utilize its plant.