Reuters reports that the pair are in talks over the sale, although there are 15 potential bidders. Ford has said that it intends to close the plant from 2025.

If BYD succeeds in buying the German factory, which is in Saarlouis, on the border with France and 40km south of Luxembourg, it will be the second plant that it has bought from Ford.

Last year BYD bought the Camacari industrial complex in Brazil which had made the Ford Ka and EcoSport for South American markets.

Ford has also said that it intends to cut 3200 jobs at its factory in Cologne. The cuts will come from 2500 product development positions and 700 administrative roles.

The job cuts at Cologne will mean Ford will move some product development work to the US. Germany’s IG Metall union said that it will disrupt the car-maker across the continent if the cuts go ahead.

Reuters said rising costs for EV battery materials and projected slowdown in the US and European economies are putting pressure on car-makers to cut costs.

It said that the EV price war launched by Tesla earlier this month has intensified that pressure.

Ford’s Cologne site employs about 14,000 people including 3800 at a development centre in the Merkenich area.

Ford told staff of its plans last week and said that the shift to production of EVs requires structural changes.

A Ford spokesperson at its headquarters in Dearborn, Michigan, said discussions with the German works councils were continuing and that the company needs to be “more competitive” as it transitions to EVs. 

Ford last year announced a $A3 billion investment to expand production at its Cologne plant to make an all-electric model for the mass market. 

The plant currently produces the Ford Fiesta as well as ICE engines and transmissions.

Ford employs about 45,000 people in Europe. It is planning seven new electric models in the region, a battery assembly site in Germany and a nickel-cell manufacturing joint venture in Turkey as part of a major EV push on the Continent.

It also has a partnership with Volkswagen to produce 1.2 million vehicles on the German carmaker’s MEB electric platform over six years.

Ford and Volkswagen representatives said that partnership remains in place although Ford’s US spokesperson added that Volkswagen’s role in Ford’s next generation of European EVs was still to be determined.

Ford in June last year separately warned of weakening economic conditions in Europe and said it would consider “significant” job cuts in the near term at its factory in Spain and its Saarlouis plant in Germany.

It said that the shift to EV production meant it would require fewer labour hours to assemble cars.

Ford’s pre-tax profit margins in Europe were 2.2 per cent of sales for the first nine months of 2022, well below levels in North America.

By Neil Dowling