Electric Mini to be made in UK as BMW reverses plan to build in China
BMW[1] will invest more than £600m to build two new electric Mini[2] models in the UK, safeguarding up to 4,000 jobs and boosting confidence into the UK’s troubled car sector[3].
The investment is backed by around £75m of taxpayer support, according to reports.
The German carmaker will manufacture the new models in the UK from 2026, though it plans to import batteries[4] for the cars from either Europe or China.
The German-based car maker’s multi-million pound investment will be used to expand and transform its existing Cowley and Swindon plants, and will secure 4,000 high-quality jobs, according to ministers.
The investment will see the Mini Cooper and the larger Mini Aceman to be built alongside conventional powered cars. BMW has said it will build the Countryman version in Leipzig – the first to be manufactured in Germany.
Government sources declined to set out the level of taxpayer support being offered to BMW[5], but hasvenot disputed the previously reported figure of £75m.
Rishi Sunak said the Government was securing jobs and growing the economy “by backing our car manufacturing industry[6]“.
“BMW’s investment is another shining example of how the UK is the best place to build cars of the future,” the Prime Minister added.
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Chancellor Jeremy Hunt said BMW’s investment was a “huge vote of confidence in this country as a global leader in electric vehicles[7]“. “This industry is motoring, creating thousands of jobs and powering our green transition,” he said.
The Society of Motor Manufacturers and Traders said it showed carmakers continued their recovery from recent difficulties, including global chip shortages.
BMW said last year it was switching electric Mini production to China[8], citing inefficiencies of building petrol engine cars alongside battery vehicles. The move would have been a serious blow to the UK, where car production has fallen sharply since Brexit[9].
Business Secretary Kemi Badenoch[10] said the BMW news is further evidence the Government’s plan for the car sector is working. Stellantis started production of electric vans at its factory in Ellesmere Port last week, while Jaguar Land Rover owner Tata Group announced plans in July for a £4bn UK battery plant in Somerset[11] that will start supplying cells in 2026.
She declined to comment how much Government support BMW was receiving. “All I can tell you is what we put in the automotive transformation fund, and that’s money that goes to many different companies across the sector not just one. We put in £350m in 2021.
“We do have to do some investment ourselves as Government, that is standard, and we’re competing against countries from all around the world as well as the EU and we are winning. We’re not doing anything out of the ordinary,” she told BBC radio.
The investment decision comes despite it being unclear that controversial EU rules of origin[12] which require manufacturers to show that 40 per cent of the vehicle by value is produced in the UK or the EU will be relaxed. Cars unable to demonstrate this face increased tariffs.
Ms Badenoch said discussions were “progressing” with the EU about relaxing the rules.
References
- ^ BMW (inews.co.uk)
- ^ Mini (inews.co.uk)
- ^ car sector (inews.co.uk)
- ^ batteries (inews.co.uk)
- ^ declined to set out the level of taxpayer support being offered to BMW (inews.co.uk)
- ^ car manufacturing industry (inews.co.uk)
- ^ electric vehicles (inews.co.uk)
- ^ switching electric Mini production to China (inews.co.uk)
- ^ Brexit (inews.co.uk)
- ^ Kemi Badenoch (inews.co.uk)
- ^ Tata Group announced plans in July for a £4bn UK battery plant in Somerset (inews.co.uk)
- ^ controversial EU rules of origin (inews.co.uk)