BMW ploughs £600m into Mini factory: Oxford plant to build two new electric car models

BMW will invest £600million to produce two electric models at its Mini factory in the UK in a fresh boost for the car industry that will safeguard 4,000 jobs.

The investment will be backed by a taxpayer subsidy said to be worth around £75million and builds on recent UK commitments announced by Vauxhall and Tata, the owner of Jaguar Land Rover.

It will mean that from 2026, two electrified models – the Mini Cooper 3-door and Mini Aceman – will be made at the Mini factory in Oxford. The plant will be all-electric from 2030.

Prime Minister Rishi Sunak said: ‘BMW’s investment is another shining example of how the UK is the best place to build cars of the future.’

The decision allays fears about the future of the 110-year-old plant in the city’s Cowley area – which started building Minis in 1959 – as production of petrol vehicles are phased out.

Investment: From 2026, two electrified models – the Mini Cooper 3-door and Mini Aceman – will be made at the Mini factory in Oxford. The plant will be all-electric from 2030

Those fears intensified when it was revealed last autumn that BMW was moving production of the electric Mini – made at the site since 2019 – to China.

The Chinese joint venture with Great Wall Motor (GWM) is still due to take place following the latest announcement, producing the same electric models as will be made at Cowley.

The larger Mini Countryman will, meanwhile, start production at BMW’s Leipzig factory in Germany in a few weeks’ time – with both electric and internal combustion engine models. 

Stefanie Wurst, head of the Mini brand, said: ‘Mini has always been aware of its history – Oxford is, and remains, at the heart of the brand.’

The UK car manufacturing sector suffered a slump when chip shortages in the wake of the pandemic crippled production, which last year fell to the lowest level since 1956.

The industry received a blow when Honda decided to quit Britain and close its factory in Swindon, switching electric car production back to Japan.

However, earlier this month Vauxhall began electric van production at its plant in Ellesmere Port in Cheshire after a £100million investment from parent company Stellantis.

A key challenge in the switch-over to electric vehicles – with new petrol and diesel car sales to be phased out by 2030 – has been the development of so-called ‘gigafactories’ that make the batteries for electric models. 

Subsidy: Business Secretary Kemi Badenoch

One such site is being built in Sunderland to serve the Nissan plant, the UK’s biggest car factory. 

And Tata also recently announced plans to build a £4billion gigafactory in Somerset, reportedly backed by £500million of government help.

BMW production chief Milan Nedeljkovic said the company wants to use batteries made in Europe for the new models at the Mini factory but did not specify whether they could come from the UK.

The firm will also invest in its plant in Swindon that makes Mini parts but Nedeljkovic said it was too soon to say what would happen to its engine factory in Hams Hall, near Birmingham.

Business Secretary Kemi Badenoch, who visited the Mini factory yesterday, refused to comment on speculation that the Government funding was worth £75million but added: ‘We do provide some subsidy, very light subsidy, in the auto industry because it faces so much difficulty, and some of that is regulatory.’

Mike Hawes, chief executive of industry body Society of Motor Manufacturers and Traders (SMMT), said: ‘BMW’s landmark announcement is yet another vote of confidence in UK automotive manufacturing.’

However, the industry faces looming uncertainty when ‘rules of origin’ governing trade between the UK and EU come into force in January.

Under the rules, the two sides can only trade tariff-free when 45 per cent of the value of the vehicle being exported comes from Britain or the EU.

This post first appeared on Dailymail.co.uk