LONDON –
BMW announced plans Monday to transform its Mini factory in Oxford, England, to produce nothing but electric vehicles, protecting thousands of jobs at a site that has been making cars for more than 100 years.
The German automaker said it would invest 600 million pounds ($751 million) in the project, allowing the factory to begin making two new all-electric models in 2026 before moving completely to electric vehicle production four years later.
The commitment came after the U.K. government agreed to plow an undisclosed amount of taxpayer funding into the project.
BMW’s plans are a vote of confidence in Britain’s beleaguered auto industry, which is struggling to compete amid an industrywide shift to electric vehicles and the challenges created by the U.K.’s exit from the European Union’s single market.
The company’s decision also ensures the iconic Mini will continue to be made in the country where it was born as BMW aims to make the brand 100% electric by 2030.
“Today we are announcing the new generation of fully electric Minis are being built here in Oxford, and setting the path for the future of this site,” Milan Nedeljkovic, the BMW Group board member in charge of production, said.
U.K. Business Secretary Kemi Badenoch declined to comment on reports that the government would invest 75 million pounds ($94 million) in the project. Releasing such information would complicate negotiations with other companies as the government seeks to attract investments in electric car production, she said.
The government has mandated that only zero-emission cars and vans may be sold in the U.K. by 2035.
“What I will say is that we do provide some subsidy, very light subsidy, in the auto industry because it faces so much difficulty, and some of that is regulatory,” Badenoch told reporters in Oxford. “So if we’re asking manufacturers to transition to net zero, that creates additional costs which make it a little bit harder, so we do have to factor that in.”
One of the biggest hurdles facing Britain’s auto industry is building factories to make the batteries needed to power the next generation of electric vehicles.
British car production slumped 40% from 2019 through 2022 as the industry was hit by Brexit and COVID-19, as well as post-pandemic computer chip shortages and the transition to electric vehicles, according to figures from the Society of Motor Manufacturers and Traders.
While output has rebounded this year as chip shortages eased, the trade group estimates annual production at about 840,500 vehicles, down from more than 1.3 million in 2019.
The Mini project is the latest boost for the U.K. auto industry, with vehicle makers announcing plans to invest more than 6 billion pounds ($7.5 billion) in Britain over the past two years.
BMW said it would make electric versions of the Mini Cooper three-door and the compact crossover Mini Aceman at the Oxford plant.
The investment ensures Britain will remain one of the manufacturing hubs for the Mini after previous announcements of projects in China and Germany.
British Motor Corp. began making the Mini in Oxford in 1959. The small, two-door car quickly became an icon of the Cool Britannia of the 1960s. It featured in the 1969 heist movie “The Italian Job” and its 2003 remake.
BMW acquired the brand in 1994 when it bought Rover Group, the successor to British Motor.
“Mini has always been aware of its history — Oxford is and remains the heart of the brand,” Stefanie Wurst, the head of the Mini brand, said.