Geely Auto will build two electric SUVs at Ford’s factory in Spain, and the two firms will jointly develop a new model, they said on Thursday, as rising Chinese carmakers race to use traditional carmakers’ underutilised factories and get ahead of European local-content rules.In a joint venture that will be 66% owned by Ford and 33% by the Chinese firm, the first Geely brand electric SUVs will roll off the Valencia plant’s production line in 2028.Ford’s existing workforce will become employees of the new joint venture, and the plant will likely require more employees as production ramps up, Ford’s European head said in a briefing.Geely does not plan on bringing any workers from China, added its senior vice-president Victor Yang.“We have the ability to really load up the facility,” Ford’s European head Jim Baumbick told Reuters. “That’s the goal.”The two carmakers had been in talks on a partnership for many months, which was reported by Reuters in February. Executives said that a long relationship dating back to Geely’s purchase of Volvo Cars from Ford in 2010 had helped those talks.We can’t be just an assembly plant. We need the technology to stay here. It’s fundamental that the supply chain is grounded here and that this generates jobs— Juan Jose Picazo, secretary-general of CCOO industrial unionSuch co-operation with a carmaker like Geely would likely not be possible in Ford’s home market, where a US Senate committee on Wednesday approved legislation to toughen a ban on Chinese carmakers entering the US.“The automotive sector is undergoing an absolute and sweeping transformation,” Spanish Prime Minister Pedro Sanchez said in a speech at the plant. “Strategic alliances are a necessary condition to compete and to lead ... Spain wants to play a part in this major leap forward.”Yang told Reuters that the first electric SUV to be made in Valencia is the EX5, which is already sold in Europe, and the other vehicle the Chinese carmaker will make at the plant is still in development.“We need to rely on strong partners with the right know-how and expertise to support our localisation efforts,” Yang said.This will be Geely Auto’s first production facility in Europe.The deal helps both companies overcome formidable challenges.Geely senior vice-president Victor Yang says the first electric SUV to be made in Valencia is the EX5. Picture: Sopa Images/LightRocket via Getty Images (SOPA Images) Chinese carmakers are racing to find available space in factories on the continent to make their vehicles ahead of upcoming EU legislation that will have a “Made in Europe” clause, mandating minimum local content in electric vehicles. Spain is a popular choice among Chinese carmakers because it is Europe’s second-largest car-manufacturing country after Germany and has lower labour and energy costs. BYD, the world’s largest EV maker, has said the country is on its shortlist. China’s Leapmotor will make an electric SUV at joint-venture partner Stellantis’s factory in Zaragoza, and the premium brand Hongqi has been talking to Stellantis about building cars in one of its Spanish plants. Last month Chinese state-owned carmaker SAIC said it would set up its first European factory in Spain’s northwestern region of Galicia.Unions were cautiously optimistic about the deal, as long as promises of creating jobs and engaging with local suppliers were fulfilled, said Juan Jose Picazo, secretary-general of the CCOO industrial union. “We can’t be just an assembly plant,” Picazo said. “We need the technology to stay here. It’s fundamental that the supply chain is grounded here and that this generates jobs.”The Chinese need for production lines in a hurry is a boon for traditional carmakers like Ford with plenty of unused factory space.Just a decade ago, Ford was Europe’s No 4 carmaker with sales of more than a million cars, according to industry data. Last year the company sold just over 426,000 cars and had fallen to eighth place.From Ford’s perspective, this is pragmatic. It reduces fixed cost exposure, keeps the plant alive and effectively monetises excess capacity— Bill Russo, CEO of Shanghai-based advisory firm AutomobilityThe company has been through several restructurings in Europe and currently makes only its Kuga SUV in Valencia, which has annual production capacity of around 500,000 vehicles. According to data from GlobalData, the factory was operating at just 26% capacity in 2025.The No 2 US carmaker will start producing its Bronco SUV in Valencia in 2028, and Ford’s Baumbick said bringing in Geely would “leverage it [Valencia] for scale to compete at the right level of cost in Europe”.He added that there were no “hard constraints” on how much of the factory’s capacity Geely can use.“From Ford’s perspective, this is pragmatic,” said Bill Russo, CEO of Shanghai-based advisory firm Automobility. “It reduces fixed cost exposure, keeps the plant alive and effectively monetises excess capacity.”In December Ford said it would develop two small EVs with Renault using the French carmaker’s technology.Ford and Geely will jointly develop a crossover SUV that will come with different powertrains — fully electric, plug-in hybrid and extended-range EV — and start production in 2028.Chinese carmakers lead the world in developing flashy new EVs at great speed and are expanding aggressively outside their home market, the world’s largest, where sales have fallen so far this year.Reuters