Ford in Talks to Sell German Plant to China’s BYD

The talks are still in a preliminary stage and a deal may ultimately fall through. Ford is also gauging interest from around 15 potential investors. They range from manufacturers, such as BYD, to financial investors, who could potentially partner with a manufacturer, the people said. 

A representative of Ford declined to comment. A BYD representative couldn’t be reached for comment.

Selling the Saarlouis plant would mark another step in Ford’s efforts to overhaul its European operations and shift completely to electric vehicles. It would also be a major step for China’s electric-car industry, which has begun expanding into European markets.

BYD is the biggest electric-vehicle maker by sales in China, the world’s largest EV market. The company already sells some EVs, including buses, in Europe. Buying the plant would give BYD a stronghold for further expansion on the continent, where there is strong growth in the market for EVs and hybrids.

Ford announced the end of production in Saarlouis in June. It employs around 4,600 people there, but said last year that future EVs for Europe would be built at its plant in Valencia, Spain, and its main plant in Cologne, Germany.

This week, German union officials said Ford had guaranteed that up to 700 people working in Saarlouis would continue building components after vehicle production ends in 2025. Labor representatives are negotiating over the retention of additional employees, but the future for the bulk of the workforce is uncertain.

Should BYD and Ford reach a deal, it would mark a major milestone for the Chinese company, which last year sold 1.86 million electric and plug-in hybrid vehicles, three times as many as the year before.  

The potential investment comes on the heels of expansion into Europe by

Tesla Inc.,

which last year began producing electric vehicles at a new plant near Berlin.

Write to William Boston at william.boston@wsj.com