After negotiating a deal to improve its British Mini factory, BMW will announce a PS500m investment. This is as the Government tries to electrify Britain’s ailing car industry.
After months of speculation about Mini’s long-term future, the German company that owns Mini has received PS75m from the public to overhaul its Oxford plant.
BMW has not yet provided details about its plans for the site. However, the contribution from the taxpayer is coming out the Government’s Automotive Transformation Fund. (ATF) can be tapped by companies who want to electrify their car-building.
BMW stated two years ago that it would cease making electric Minis for the UK and instead move production to China.
Instead, the facility was converted to make petrol models. This puts its future in danger as many countries around the globe are planning to ban diesel and petrol cars by 2030.
The speculation is that BMW plans to resume electric production with the PS500m investment.
According to the PS1bn ATF rules, the government must invest in expanding and focusing on electric motors, battery production, or electric drivetrains.
Although BMW declined to comment on this plan as it was first reported by Sky News’ Sky News, they said that the Oxford plant is crucial to BMW’s future.
The electric future of British carmaking is now in doubt after the collapse Britishvolt (the only independent battery manufacturer in the UK).
The largest car manufacturer in Britain, Nissan, has its own battery supply near Sunderland. However, the company has warned that Britain’s shrinking auto industry could pose a threat to its supply of parts and pose a danger to the plant over the long-term.
Last year, carmaking fell by 10 percent to 775,000 vehicles and exports dropped 14 percent. This figure is half of the one made five years ago, and the industry has struggled for recovery since the removal coronavirus lockdown restrictions.
Jaguar Land Rover, a big rival, has not yet secured a local supply of batteries. It is believed that it is considering the UK for a gigafactory. However, needs a large capital injection from Government and support for its steel business.
Aston Martin and Bentley, luxury and sports car manufacturers, can import batteries without any customs penalties. However, Mini and Toyota, along with JLR and Nissan, make the majority of British cars. They have not yet announced a plan for a local battery plant.
According to a BMW spokesperson, the Oxford plant is an important part of the BMW Group’s production network.
“The next Mini generation will see Oxford produce the majority of Mini models: the Mini Cooper three-door, five-door, and convertible models as well as the Mini Cooper three and five-door models. This is one of our most valuable vehicles and a global bestseller. We will announce any future production plans in due course. Media speculation is not our business.
As part of BMW’s agreement with Great Wall, new Mini models include a hatchback as well as a small SUV.
Separately, Volkswagen appears to be pushing for a gigafactory in America ahead of another European battery plant, as the path to subsidies in America is clearer.
There are dozens of factories for making batteries around the globe. Access to these machines is restricted. The company will send those resources to America first since the Inflation Reduction Act, which offers tax breaks to car makers in the US, is in place.
Although the EU has already promised to respond to the battery bonanza, the details of the response are still being worked out.
Volkswagen spokesperson said that they are still looking for suitable locations to build our next cell factories in Eastern Europe or North America. There have not been any decisions yet. While we remain true to our goal of building cell factories in Europe for approximately 240 GWh by 2030, we require competitive framework conditions. We will wait to see what the so-called EU Green Deal brings.