Ford eyes Geely partnership to dodge tariffs

FORD Motor Company and Chinese manufacturer Geely are reportedly in discussions regarding a potential partnership as more of the world’s automotive manufacturers work to collaborate on sharing increased development and production costs.

 

According to an article published by Reuters, the companies are in talks that may allow Geely access to production capacity at several of Ford’s European facilities, the duo also said to be considering sharing vehicle platforms and technologies, including those for autonomous driving.

 

The report says sources close to the matter have travelled to China to “intensify discussions” with key executives, and that the discussions, more broadly, have been “underway for months”.

 

While the full scope of the talks – and just how close Ford and Geely are to striking a joint venture – are unknown, the deal could assist the Blue Oval in skirting tariffs imposed by the Trump administration relating to Chinese made cars.

 

Chinese manufacturers have effectively been shut out of the US automotive market because of the tariffs and restrictions imposed by both the current (Trump) and former (Biden) administrations, which cited national security risks from data collection and vehicle software.

 

Any move by Ford to bring advanced Chinese vehicle technology to the United States market would likely draw scrutiny from the Trump administration and its lawmakers.

 

It could also help Ford in its race to catch up with global competitors in areas that include autonomous driving and connected vehicle technology.

 

Ford chief executive officer Jim Farley has expressed previously the desire for his company to close the competitive gap on China, referring to the breath of technology now offered by some Chinese vehicle marques as the most humbling thing he has ever seen.

 

Mr Farley also spoke on whether the Trump administration would nix a potential joint venture between Ford and Geely saying, “I don’t think so … as long as it had the right guardrails and that we think about it the right way”.

 

Further, and in accessing Ford of Europe’s underutilised factory space, Geely could benefit by avoiding the European Union’s tariffs on Chinese-made electric vehicles.

 

In 2024, the European Union introduced provisional tariffs of up to 37.6 per cent on imported Chinese EVs, warning of a potential flood of unfairly subsidised vehicles, and damage to the European automotive manufacturing sector.

 

Since that time, several Chinese OEMs have made moves to establish production facilities in Europe with many European component suppliers striking deals with Chinese manufacturers along the way.

 

As a side note, it is worth recalling that Geely purchased Volvo from Ford back in 2010 for the sum of $US1.8 billion ($A2.6b).