BMW is investing $1.7 billion in its U.S. manufacturing hub in South Carolina to produce electric vehicles domestically, part of a global overhaul to prepare for a new generation of EVs.
The German luxury carmaker is spending $1 billion to retool its Spartanburg plant to build at least six new EV models by 2030 and $700 million to build a battery assembly facility and hire 300 people in nearby Woodruff.
BMW also announced a deal with Chinese-owned Envision AESC to build a new battery cell plant in South Carolina to supply the project.
“Plant Spartanburg has been a cornerstone of the global success of the BMW Group,” Chief Executive Officer Oliver Zipse said in a statement. “Going forward, it will also be a major driver for our electrification strategy.”
The investment furthers BMW’s strategy – which differs from pushes by Tesla and Volkswagen – to buy battery cells rather than try to get involved in their production.
BMW aims to pick up speed in an increasingly competitive market through its “Neue Klasse,” or New Class, of EVs built on dedicated electric platforms starting in 2025.
Those cars will be built to recycle as much material as possible for use in new vehicles and to boost revenue from drivers booking digital features.
Zama, Japan-based Envision AESC, a former battery unit of Nissan, was sold to China’s Envision Group in 2018.
The cellmaker will build a 30 gigawatt hour plant to make customized round lithium-ion batteries for Neue Klasse.
BMW rival Mercedes-Benz also recently announced a deal with Envision AESC to set up a U.S. cell facility that will supply modules by the middle of the decade.
The batteries, which BMW designed in-house, will enable longer ranges and faster charging than the prismatic cells it currently uses, the company has said.
At roughly half the cost, the technology follows the strategy at Tesla, which has been using a cylindrical shape for some time.
Batteries are among the major cost drivers of an electric car, and improving technology has typically delivered annual efficiency gains.
That trajectory has come under strain due to the surging cost of raw materials, challenging automaker forecasts of soon selling EVs for a similar margin to combustion-engine autos.
The Spartanburg facility, built nearly 30 years ago, is BMW’s largest assembly plant and biggest export site, making popular U.S. models like the X3, X5 and X7 SUVs.
It ships roughly 70% of production volume to countries like China, Germany and South Korea. It has annual capacity of 450,000 units.
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