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BMW will invest more than £600 million to produce electric Mini cars in Oxford, protecting the historic factory and delivering a vote of confidence in the British car industry.
The German carmaker’s investment in Cowley will be backed by around £75m of taxpayers’ money, according to people familiar with the matter. Production of the two new models will begin in 2026, but BMW plans to import car batteries from Europe or China.
The plant’s future has been under threat since BMW said last year it would stop producing its first electric Mini model, leaving it reliant on gasoline cars, which the German group has pledged to phase out by 2030.
BMW will build two new electric models, the three-door Mini Cooper and a new small Mini Aceman, in Oxford under plans announced late on Monday, people familiar with the matter said.
Both models are based on systems developed by BMW and China’s Great Wall Motors and will also be produced at a new joint venture factory in China starting next year.
British Prime Minister Rishi Sunak praised BMW’s decision as “yet another shining example that Britain is the best place to build cars in the future.”
BMW’s move is a much-needed boost to the British car industry. Production has fallen by 40% since the outbreak began due to factory closures, global parts shortages and some manufacturers’ decisions to move models overseas, although power output has increased due to rising demand.
The government has set aside £1 billion to try to stimulate investment in battery technology and attract new manufacturers such as Tesla. Despite recent investments from Jaguar Land Rover and its owner Tata Motors, as well as Nissan, Stellantis and now BMW, no new major entrant has decided to build a plant in the UK.
China’s BYD said earlier this year that Brexit meant the UK didn’t even make the top 10 as the company considered building factories in Europe.
The new investment will also ease concerns about Cowley’s strategic importance to BMW. In addition to the same Mini electric models produced by Great Wall Motors in China, BMW will also produce its high-end version of the Mini Countryman in Leipzig, Germany.
BMW is expected to say the investment in Oxford strengthens its commitment to the UK, where it also owns an engine plant in Hamshall, a metalworking plant in Swindon and luxury car brand Rolls-Royce.
BMW’s move comes as British car plants seek investment to produce electric models as the industry shifts away from traditional internal combustion engines.
Vauxhall owner Stellantis started producing electric vans at Ellesmere Port last week after investing around £100m to save the plant from closure.
Jaguar Land Rover is investing about 15 billion pounds to produce new electric models in the UK, and parent company Tata announced this summer that it will invest 4 billion pounds in a new battery factory that will first use Chinese technology to support Jaguar Land Rover’s electric models.
Nissan, which runs the UK’s largest car factory, has invested around £1 billion in its battery partner AESC, which is owned by China Envision Energy. The Japanese group has committed to producing at least one new electric model in Sunderland. The Financial Times reported earlier this year that the company was also considering a future model for the site.
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