Ford and Geely partnership could reshape automotive landscape

Ford and Geely are at the center of one of the most significant potential deals in recent years. Both companies are negotiating a partnership that could radically reshape the global automotive landscape. According to Reuters, discussions focus on two key areas: using Ford's European production capacity to manufacture Geely models and exchanging advanced technologies, including autonomous driving systems and connected vehicle software.

The talks on European production have progressed the furthest. Ford is considering transferring some of its capacity in Germany and particularly in Valencia, where idle production lines could offer Geely a strategic entry point into the European market. This arrangement would help the Chinese conglomerate avoid high EU tariffs on electric vehicle imports from China, while Ford could partially offset costs related to plant transformation and declining margins.

Ford's leadership has shown interest in the alliance. Jim Farley has repeatedly stated that Chinese automakers are far ahead in connected vehicle technologies and software architectures, calling this gap the most humbling experience of his career. For Ford, collaboration could accelerate technological development and reduce R&D expenses, which are rising rapidly across the industry.

However, the deal is not without political risks. Any presence of Chinese technology in the American market could draw scrutiny from the Trump administration, which has already imposed strict restrictions on software and communication systems of Chinese origin. Consequently, the partnership might be limited to Europe, where regulatory barriers are lower and the need for production localization is more pressing.

Meanwhile, Geely continues to expand its global partnership network aggressively. The conglomerate already collaborates with Renault in South Korea and Brazil, builds EV platforms for Volvo and Lotus, and is preparing to launch Leapmotor in Europe. A partnership with Ford would represent the most substantial step in Li Shufu's strategy to strengthen the company's influence beyond China.

No final decision has been reached yet. The parties have been discussing details for several months, while denying any contacts. It remains unclear whether these negotiations will lead to an actual alliance. One thing is certain: pressure on automakers is intensifying, and even companies like Ford can no longer sustain the technology race alone.