BMW has announced a substantial investment of €650 million ($711 million) to transform its main plant in Munich into an exclusive electric vehicle (EV) production facility by the end of 2027. This move marks a significant stride in BMW’s commitment to embracing the electric age. The company is constructing four new buildings, including a state-of-the-art vehicle assembly line and body shop, as part of the conversion.
Key Points:
- Strategic Investment: BMW’s €650 million investment underscores its strategic commitment to electric mobility. The funds will facilitate the overhaul of the Munich plant, aligning it with the company’s vision for a future dominated by EVs. The investment includes the creation of modern facilities to support electric vehicle manufacturing.
- Facility Restructuring: The transformation involves relocating traditional engine manufacturing to Great Britain and Austria, with the aim of making the Munich plant exclusively focused on EV production. Approximately 1,200 employees have been retrained or relocated to other facilities. The Munich site has a rich history of producing internal-combustion vehicles since 1922.
- EU Regulation Impact: While BMW has not set a specific target for discontinuing combustion engine car production, it faces pressure from European Union regulations. The EU effectively prohibits the sale of new petrol and diesel cars in the bloc from 2035, prompting automakers to accelerate their transition to electric vehicles.
- EV Sales Projection: BMW aims to increase the share of all-electric vehicles in its sales, targeting a ratio of one-third by 2026. In 2023, EVs constituted 15% of the company’s total sales. The transformation of the Munich plant is a pivotal step in achieving this ambitious goal.
- ‘Neue Klasse’ Initiative: BMW unveiled its ‘Neue Klasse’ preview at the IAA car show in September, representing a multibillion-euro effort to bridge the technology gap with competitors like Tesla. The model, expected to be similar in size to BMW’s popular 3-series, will be produced at the Munich plant alongside combustion engine cars.
- Global Production: The ‘Neue Klasse’ car will not be exclusive to the Munich plant; it is also slated for production at BMW’s new facility in Debrecen, Hungary, as well as in Shenyang, China, and San Luis Potosi, Mexico.
BMW’s strategic investment in the Munich plant demonstrates a forward-looking approach, positioning the company at the forefront of the electric vehicle revolution.