Construction of electric cars: BMW invests 800 million in Mexico

Status: 06.02.2023 11:30 a.m

The Munich automobile group BMW is investing 800 million euros in its plant in San Potosí. Among other things, fully electric cars are to be manufactured there. The group is also pushing ahead with its electrical strategy in other plants.

The car manufacturer BMW also wants to build fully electric cars in Mexico from 2027. The group announced on Friday an investment of 800 million euros for the integration of the “New Class” models and for a new assembly center for high-voltage batteries at its plant in the central Mexican state of San Potosí.

Around 1000 new jobs are to be created in the companies in the Mexican state. The investment is BMW’s latest foray into the electric car business. By 2030, the company aims to convert more than half of its sales to fully electric vehicles.

Electrical production plants at home and abroad

In recent months, the manufacturer had presented plans for several other overseas locations – including a $1.7 billion investment in the United States. A BMW factory for the assembly of high-voltage batteries is also being built in Hungary for 2 billion euros.

“We are consistently aligning our production network to electromobility,” said BMW Board Member for Production Milan Nedeljkovićl. The carmaker also wants to accelerate production of the new electric car series, which is scheduled to roll off the assembly line at the Debrecen plant in Hungary from 2025. The plant in Hungary is said to be BMW’s first to operate entirely without fossil fuels.

The BMW plant in San Luis Potosí, Mexico

Image: picture alliance/dpa/BMW

For the German plant in Leipzig, BMW has already announced investments of 800 million euros between 2020 and the end of 2024 – for the establishment and expansion of component production for electric cars. In addition to the two existing production lines for battery modules and the new paint shop for battery cells, another battery module line, four cell paint lines and two assembly lines for the production of high-voltage batteries will be added by April 2024. The first fully electric BMW car was built in Leipzig between 2013 and 2022.

In the USA, the DAX group is investing in the expansion of the Spartanburg production site in the state of South Carolina. In addition to the production of electric vehicles, an assembly center for high-voltage batteries is also to be set up there. According to BMW, it intends to produce at least six all-electric models in the USA by 2030.

Mexico important location

Mexico is an important automotive location mainly because of its proximity to the important US market, the expertise of the employees and the relatively low wage costs. The BMW production facility in San Luis Potosí opened in 2019. BMW is already producing the 3 Series sedan, the 2 Series coupé and the M2 there. According to BMW, the plant is designed in such a way that only minor adjustments to body construction and assembly are required to integrate the new all-electric vehicle architecture.

Other German automotive companies such as Volkswagen, the manufacturer Audi, which belongs to the VW Group, and Daimler also produce cars in Mexico. The largest German car company VW has cars manufactured in two plants in the country. According to this, Puebla is home to the largest automobile plant in Mexico and one of the largest vehicle plants in the VW Group. Around 294,000 vehicles were manufactured there in 2021, and more than 325,000 engines in the second VW plant in Silao. Cars have been rolling off the assembly line for Audi at the plant in San José Chiapa since 2016. Almost 4900 people are employed there.

500 million for battery assembly center

More than half of BMW’s planned new investments in Mexico – 500 million euros – are said to be for the battery assembly center on the car manufacturer’s existing factory premises. Around 500 additional employees will work there.

The remaining 300 million euros will flow into the adaptation and expansion of the body shop and the construction of a new assembly line for installing the battery packs, plant manager Harald Gottsche told the news agency Reuters. “We will start construction of the extensions and new battery assembly in early 2024 and ramp up production in early 2027,” he said.

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