BMW is now the latest international automaker to confirm plans to build electric vehicles and the batteries to power them in the U.S. at a cost of $1.7 billion.
The investment will lead to the production of as many as six fully electric models at the automaker’s current assembly complex in Spartanburg, South Carolina by 2030, CEO Oliver Zipse announced while at the sprawling site Wednesday morning. The facility currently serves as the primary production source for BMW’s line-up of “Sport-Activity Vehicles,” including the midsize X5 model.
“For decades, Plant Spartanburg has been a cornerstone of the global success of the BMW Group,” said Zipse. “It is the home of the BMW X models that are so popular all over the world. Going forward, it will also be a major driver for our electrification strategy, and we will produce at least six fully electric BMW X models here by 2030. That means: The ‘Home of the X’ is also becoming the ‘Home of the Battery Electric Vehicle.”
BMW’s primary X-model production site
The Spartanburg operation is one of BMW’s largest worldwide and has so far produced more than 6 million vehicles since opening three decades ago. It currently employs over 11,000 people. About $1 billion of the funding will go into the production complex itself.
BMW was one of the first global automakers to get into electrification with models like the little i3 all-electric city car and i8 plug-in hybrid sports car, which are no longer in production. But it was slow to expand the line-up as it explored several different design options. For several years it focused on an approach that would allow a vehicle to be powered by a variety of different powertrain alternatives, including gas, hybrid and all-electric. It now is shifting to a strategy focused on using unique, skateboard-like platforms solely dedicated to battery-electric drive.
The Spartanburg plan is already producing several plug-in hybrid models, including the X3 xDrive30e and X5 xDrive 45e. In 2021, the factory assembled nearly 70,000 of the electrified models.
Currently, the complex assembles 11 models, the automaker noted in a release, “including the BMW X3, X4, X5, X6 and X7 Sports Activity Vehicles, four BMW M models and two plug-in hybrid electric models.” The facility also will add the limited-volume XM crossover next year. It will be the most powerful street legal model ever from the high-performance BMW M division. And it will be produced in Spartanburg.
Specific details TBA
BMW recently launched European production of the iX and i4 battery-electric vehicles and is preparing to roll out the all-electric i7, a version of its flagship 7 Series sedan.
The Bavarian automaker has not laid out specifics on what new all-electric models will follow in South Carolina but it is expected to continue focusing on SAV designs — the term it uses for what other manufacturers call SUVs or crossovers.
Battery plant by the numbers
In addition to the $1 billion plant expansion, another $700 million will go into producing lithium-ion batteries at a new facility in nearby Woodruff, South Carolina. The facility will be operated by Envision AESC and is set to provide new round cell lithium-ion batteries. About 300 new jobs will be created at the 1 million square-foot operation.
All told, the plant should have capacity to produce 30 gigawatt-hours of cells annually. Depending upon the size of the pack, that should provide enough for the packs needed in anywhere from 300,000 to 500,000 all-electric models — and even more PHEVs — based on current industry averages.
BMW claims the new round cells it has developed with Envision will yield up to 20% higher energy density than the chemistry it currently uses, meaning smaller, lighter and — potentially — less expensive batteries. It expects charging speeds to increase by up to 30 percent.
The automaker has not said whether it also is upgrading the electrical architecture of its new EVs from 400 to 800 volts. That approach is becoming increasingly common and while it adds cost it provides benefits that include faster charging and improved performance.
Potential payoff for BMW and its customers
The move to U.S. EV production should play out for BMW in several ways. It will localize production of EV models that fit current market demand in the U.S. while making it easier to meet the revised American incentive program created by the Inflation Reduction Act. To get up to $7,500 in credits for its buyers, BMW will need to build EVs in the U.S. using American-made battery packs.
What’s unclear is whether it will meet a critical third mandate by sourcing key raw materials, such as lithium, cobalt and nickel, in the U.S. or the other nations listed in the IRA.
The new legislation and other factors have led to a flood of planned U.S. EV production by manufacturers including Volvo, Polestar, Hyundai, Honda, Toyota and others based abroad. Since the beginning of the year, such commitments have added up to a projected $13 billion.