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HomeBusinessBMW investment ensures Mini factories' future

BMW investment ensures Mini factories’ future

  • BMW Invests in UK Mini Factory for Electric Vehicle Production
  • Two New Electric Mini Models Scheduled for Production in 2026
  • UK Government Backing for BMW’s Investment in Electric Vehicle Manufacturing

BMW intends to invest hundreds of millions of pounds to prepare its Mini factory near Oxford for the production of a new generation of electric vehicles.

In 2026, production of two new electric Mini models is scheduled to commence at the Cowley plant.

This action is anticipated to safeguard the viability of the facility and another factory in Swindon.

Currently, over 4,000 employees are employed between the two locations.

BMW will spend £600 million modernizing the Cowley facility, expanding its body shop, and constructing a new area for battery installation.

Bmw investment ensures mini factories' future
BMW investment ensures Mini factories' future

It also intends to construct additional logistics facilities at Cowley and the Swindon factory, which produces new vehicle body panels.

This will enable two electric designs of the next generation, the Mini Cooper and the larger Mini Aceman, to be manufactured alongside conventional automobiles at Cowley.

The Countryman, a third electric model, will be manufactured in Germany.

The UK investment will be supported by government funding estimated to be worth £75 million.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders in the United Kingdom, termed the announcement a “vote of confidence” in the country’s automotive manufacturing sector.

“Not only does it secure the long-term future of the home of one of the world’s most iconic brands, but it also demonstrates once again our capabilities in electric vehicle production,” he said.

“Investments of this nature increase productivity and contribute to the nation’s employment, growth, and economic prosperity.”

Since Mini will go all-electric by 2030, BMW’s choice is important to the two UK facilities’ survival.

In 2019, the electric Mini was introduced at the Cowley plant.

Bmw investment ensures mini factories' future
BMW investment ensures Mini factories' future

The company announced last year that the majority of its electric vehicles would be manufactured in China. Where the new models were developed in collaboration with Great Wall Motor.

BMW argued at the time that producing conventionally-fueled and electric vehicles in the same factory was inefficient.

Currently, this plan has evolved.

Great Wall’s Zhangjiagang factory will start making the new models in 2020, and Cowley in 2026.

Prime Minister Rishi Sunak said BMW’s investment was “another shining example of how the UK is the best place to build cars of the future”.

Business Secretary Kemi Badenoch told reporters, in response to rumors that the amount of government funding for BMW’s Oxford plant is approximately £75 million, “I won’t comment on the figure because it complicates future negotiations.”

We provide some mild subsidies to the auto industry since it faces several problems, including regulatory.

Thus, asking manufacturers to shift to net zero adds costs that make it harder, and we must account for that.

This is the latest in a series of government-backed investments to promote the development of electric vehicles in the United Kingdom, in advance of a 2035 prohibition on the sale of new gasoline- and diesel-powered vehicles.

Jaguar Land Rover’s owner, the Indian conglomerate Tata, announced in July that it would construct a “gigafactory” to produce batteries in Somerset, a project that is anticipated to receive hundreds of millions of pounds in taxpayer funding.

Stellantis has just begun manufacturing electric vans in Ellesmere Port, Cheshire; Nissan is increasing production of electric vehicles at its Sunderland factory, while its partner Envision AESC is constructing a gigafactory nearby.

Ford is investing significantly in its Halewood plant to prepare it for the production of electric motors.

In 2020 and 2021, Ford’s Bridgend engine facility and Honda’s Swindon manufacturing closed, causing industry setbacks.

In January, Britishvolt, which had intended to construct a battery facility near Blyth, went bankrupt. The site’s future remains uncertain.

Professor of business economics at Birmingham Business School David Bailey said that the BMW announcement was “excellent news. But remember that the United Kingdom is playing catch-up.”

“We have fallen behind in EV manufacturing. We’re going to need a lot more if we are going to preserve a mass automotive industry in the UK.”

Unknown at this time is the source of the batteries for the vehicles to be manufactured at Cowley.

That could become a crucial issue in the future. Beginning the following year, new regulations will ensure that automobiles with batteries manufactured outside the United Kingdom or the European Union will be subject to high tariffs when transported across the English Channel.

BMW is among the enterprises lobbying in the EU and the United Kingdom to weaken or delay these measures.

Prof. Bailey said a 10% duty will be applied on UK-EU trade if vehicles lack local content. “This is a huge success for companies like Stellantis and BMW. This must be revised immediately.”

He added that there was considerable pressure “on both sides of the Channel” to alter the trade regulations. I believe the European Commission will eventually act, but it will likely be too late.

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