BMW to make electric Mini in UK after securing government funding

BMW will invest £600 million (€700 million) to build its next-generation electric Mini in England after securing a government funding package, in a move that will secure 4,000 jobs.

The decision by the German carmaker to invest in its Oxford plant, announced on Monday, is the result of “extensive” engagement with the UK government, according to the department for business and trade. It is understood the commitment was made after the government promised tens of millions of taxpayer funds.

From 2026, the German premium carmaker will make two electric models at its Mini plant in Oxford – the Mini Cooper 3-door and the compact crossover Mini Aceman. The plant will make only electric models as of 2030. The same two models will also be made in China and exports of those cars will begin in 2024.

BMW will also invest in its UK plant in Swindon which makes parts for Mini models. The company did not say what will happen to its engine plant in Hams Hall.

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It marks a reversal of fortunes for the UK, after BMW last year said it would make most of its electric Minis in China, citing difficulty in producing electric vehicles and cars with internal combustion engines at the Cowley plant.

The U-turn was hailed by government ministers, including the chancellor, Jeremy Hunt, who said BMW’s investment was “a huge vote of confidence in this country as a global leader in electric vehicles”.

Mr Hunt said: “This industry is motoring, creating thousands of jobs and powering our green transition.”

BMW’s move, the government said, represented a “multimillion-pound investment” but a figure was not disclosed. The carmaker is expected to provide further details on the investment, including the total sum, later on Monday.

Asked about speculation that government funding is around £75 million, business secretary Kemi Badenoch said: “I won’t comment on the figure because that creates difficulties in future negotiations.

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“What I will say is that we do provide some subsidy, very light subsidy, in the auto industry because it faces so much difficulty and some of that is regulatory. So, if we’re asking manufacturers to transition to net zero, that creates additional costs which make it a little bit harder so we do have to factor that in.”

The move represents the latest upturn in the outlook for Britain’s electric vehicle industry, which faced uncertainty with battery supplies and post-Brexit tariffs.

The Vauxhall and Peugeot maker, Stellantis, last week began to produce electric vehicles (EV) at its factory in Ellesmere Port, after a £100 million investment that made the site its first to be dedicated solely to EVs.

The announcement also follows a £4 billion investment from Tata to build a gigafactory in the UK to supply electric batteries, as well as £1 billion from Nissan and AESC to create an EV manufacturing hub in Sunderland.

The United States carmaker Ford has poured £380 million into its Halewood site, which will become the company’s first EV components facility in Europe.

Still, the industry remains on edge with both Britain and Europe’s carmakers calling for a delay in the implementation of post-Brexit “rules of origin”, under which 45 per cent of the value of an electric vehicle being sold in the European Union must come from Britain or the EU from 2024 to avoid tariffs.

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

BMW declined to comment. – Guardian