BMW firms up £600m investment to keep electric Mini production in the UK

Image: BMW Group

The announcement was made on Monday (11 September) after weeks of speculation. It will safeguard some 4,500 jobs at the Mini factory in Cowley, Oxfordshire. BMW also operates a petrol engine manufacturing plant for minis in Birmingham and a site producing panels in Swindon.

More than three million Minis have been made at the Cowley plant to date and, at present, around 1,000 are completed there each day.

The factory will need major investment to prepare for the UK’s 2030 ban on petrol and diesel car sales. It already produces the electric version of the Mini; more than half of all pure-electric vehicles manufactured in Britain last year were made at Cowley. But production capacity will need to be scaled up as Minis with internal combustion engines (ICE) are phased out.

From 2024, the plant will start producing the next-generation ICE Minis. All-new electric models will then be launched from 2026 and the process of significantly scaling back ICE vehicle production will begin.

Oxford City Council leader Susan Brown said she and her peers “warmly welcome” the news.

Brown said: “MINI Plant Oxford is an integral part of Oxford’s history, economy and identity. The plant has been at the heart of our city’s communities and industry for over a century, and we look forward to working with BMW and others to help ensure it stays that way for generations to come, starting with the planning.”

It is not yet clear whether BMW is making the entirety of the investment itself or whether there will be funding from Government coffers.

UK-wide progress

Chancellor Jeremy Hunt said: “The UK has a proud history of manufacturing and BMW’s investment is a huge vote of confidence in this country as a global leader in electric vehicles (EVs).

“And following Stellantis beginning electric vehicle production at Ellesmere Port, just last week, to Tata’s gigafactory, this industry is motoring, creating thousands of jobs and powering our green transition.”

Stellantis, parent company of Vauxhall, restarted production at its Ellesmere port factory last week after switching all manufacturing lines there to EVs. The company confirmed a £100m investment was needed to undertake this significant retrofit.

Tata Group, which owns Jaguar Land Rover, confirmed a £4bn investment in a 40GW battery Gigafactory in the UK in July. It was reported that the UK Government provided a significant subsidy to push that decision over the line.

Policymakers continue to be pressed to set out more joined-up plans to scale EV manufacturing and related component supply chains in the UK. Post-Brexit challenges, compounded by more attractive cleantech subsidy packages in the EU and US, have heightened the risk of international corporates and investors looking overseas. The Society of Motor Manufacturers and Traders (SMMT) warned in June of a missed £106bn economic opportunity by the end of the decade.

Hunt is expected to launch the UK’s own plan for unlocking investment in low-carbon sectors at the Autumn Statement in November.

Electric bus funding

The announcement from BMW comes shortly after the UK Government’s Department for Transport (DfT) opened its next tranche of funding to support the uptake of zero-emission buses including pure-electric models.

A maximum of £129m will be allocated to local authorities through the second phase of the Zero-Emission Bus Regional Areas (ZEBRA) scheme. Councils will need to bid for a share of the funding; areas that did not receive funding under the first phase will be prioritised.

The DfT has stated that the funding should support the uptake of “hundreds” of zero-emission buses. It is smaller than the first tranche of £270m.

Transport Secretary Mark Harper said: “We have already reached our initial target of funding at least 4,000 zero-emission buses and this additional funding will improve journeys for even more passengers, reaching those in the most remote areas.”

Additionally, the DfT confirmed a new research hub backed with £10m of Government funding. The Net-Zero Transport for a Resilient Future hub also includes four universities, National Highways, Network Rail, UK Research & Innovation (UKRI) and HS2 Ltd.