BMW invests 600 million pounds in mini factory: Oxford factory is to build two new electric car models

BMW will invest £600 million to produce two electric models at its Mini factory in the UK to boost the car industry and support 4,000 jobs.

The investment will be supported by a tax subsidy of around £75 million and builds on UK commitments recently announced by Vauxhall and Tata, the owner of Jaguar Land Rover.

This means that from 2026, two electrified models – the Mini Cooper 3-door and the Mini Aceman – will be manufactured at the Mini factory in Oxford. From 2030 the system will be fully electric.

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

The decision allays fears about the future of the 110-year-old Cowley factory, which began building Minis in 1959, as production of petrol vehicles ceases.

Investment: From 2026, two electrified models – the Mini Cooper 3-door and the Mini Aceman – will be manufactured at the Mini factory in Oxford. From 2030 the system will be fully electric

These fears intensified when it was announced last fall that BMW was moving production of the electric Mini, which has been manufactured at the site since 2019, to China.

According to the recent announcement, the Chinese joint venture with Great Wall Motor (GWM) is still to take place and will produce the same electric models as in Cowley.

The larger Mini Countryman will begin production at BMW’s German factory in Leipzig in a few weeks – both as an electric and combustion engine model.

Stefanie Wurst, head of the Mini brand, said: “Mini has always been conscious of its history – Oxford remains at the heart of the brand.”

Britain’s car sector suffered a slump as chip shortages amid the pandemic crippled production, which last year fell to its lowest level since 1956.

The industry suffered a blow when Honda decided to leave the UK, close its Swindon factory and move electric car production back to Japan.

However, Vauxhall began producing electric vans at its Ellesmere Port factory in Cheshire earlier this month after parent company Stellantis invested £100 million.

A key challenge in the transition to electric vehicles – with sales of new petrol and diesel cars set to end by 2030 – has been the development of so-called “gigafactories” where the batteries for electric models are manufactured.

Grant: Economics Minister Kemi Badenoch

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

And Tata also recently announced plans to build a £4bn gigafactory in Somerset, reportedly backed by £500m of government aid.

BMW production boss Milan Nedeljkovic said the company wanted to use batteries made in Europe for the new models at the Mini factory, but did not specify whether these could come from Britain.

The company will also invest in its Swindon factory, which makes Mini parts, but Nedeljkovic said it was too early to say what would happen to its engine factory at 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 £75m, but added: “We give the car industry some subsidies, very small subsidies, because “It’s facing so much difficulty,” and some of it is regulatory.”

Mike Hawes, chief executive of industry body the Society of Motor Manufacturers and Traders (SMMT), said: “BMW’s groundbreaking announcement is a further vote of confidence in British car manufacturing.”

However, the industry faces looming uncertainty when “rules of origin” for trade between the UK and EU come into force in January.

Under the rules, both sides can only trade duty-free if 45 percent of the value of the exported vehicle comes from the UK or the EU.