BMW to invest $1.7 bn in electric car production in US

The plan includes $1 billion towards expanding the company's Spartanburg US manufacturing plant and $700 million for a new battery assembly facility, BMW said in a statement.

The interior of a BMW iX M60 all-electric Sports Activity Vehicle is pictured at Germany's carmaker BMW plant in Leipzig, eastern Germany, on October 20, 2022. Eight new production lines for e-components will be built by 2024. The two existing battery module lines will be expanded next year with the addition of another line and five cell paint lines. This is to be followed in 2024 by two new high-voltage battery assembly lines. The first fuel-flexible burner for a paint dryer went into operation on October 20, 2022. The burner can burn hydrogen and methane gas, alone and in a mixture. Ronny Hartmann / AFP

"The BMW group continues the roll-out of its electromobility plan with a new investment in the US," the company said.

The Spartanburg plant in South Carolina is already BMW's biggest factory, producing 1,500 BMW X vehicles a day.

The new high-voltage battery assembly facility will be located in Woodruff, South Carolina, BMW said.

The German group has also signed an agreement with Chinese battery manufacturer Envision AESC, which will "build a new battery cell factory in South Carolina" with an annual capacity of up to 30 GWh.

The group plans to produce at least six fully electric BMW X models at the Spartanburg plant by 2030.

The aim is for the factory to become "a major driver for our electrification strategy", said Oliver Zipse, chair of BMW's management board.

The move is part of a shift towards electrification at BMW and in the German car industry as a whole.

BMW already sells the i3 model but it has nonetheless lost market share to Tesla.

The German luxury brand is aiming to have two million electric vehicles on the road by 2025, promising 13 new electric models and a revamp of its Mini series.

However, the new investment comes amid tensions over President Joe Biden's landmark "Inflation Reduction Act", which includes tax breaks for US-made electric cars and batteries.

European Union officials have said the policy could put e-cars made elsewhere at an unfair disadvantage.

German Economy Minister Robert Habeck on Wednesday warned that the US plans "must not destroy the level playing field between our two economies" and called for "a strong answer from the European side".

Speaking after talks with his French counterpart Bruno Le Maire, Habeck said companies were being "drawn away from Europe to the United States because of the strong subsidies paid".

The US is also an attractive potential production base for German manufacturers struggling with soaring energy costs in the fallout from Russia's invasion of Ukraine.

Gas prices remain low in the United States thanks to abundant domestic production.

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