BMW has announced it is investing €650 million to convert its main manufacturing facility in Munich, Germany, to exclusively produce electric vehicles from the end of 2027. Four new buildings are being constructed on-site, including a new vehicle assembly line and body shop.
Internal combustion engine manufacturing has been moved to the UK and Austria, with around 1,200 employees being retrained or relocated to other facilities. Unlike other car manufacturers, BMW has not set a specific date for discontinuing the production of vehicles with combustion engines, but will face European Union regulation which effectively bans the sale of new petrol and diesel cars in the bloc from 2035.
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All-electric vehicles accounted for 15% of BMW’s sales in 2023, with the ratio expected to increase to one-third by 2026.
BMW presented its Neue Klasse EV concept at the IAA car show in September 2023, representing a multibillion-euro effort by BMW to close the technology gap with competitors like Tesla and other EV makers. The car, which will be roughly the size of BMW’s current 3-series model line, is scheduled to be manufactured in Munich starting from 2026 alongside combustion engine vehicles. It will also be produced at BMW’s new plant under construction in Debrecen, Hungary, as well as in Shenyang, China, and San Luis Potosi in Mexico.
“We want to make this vehicle generation so modern that it looks like we skipped one generation,” BMW Chief Designer Adrian van Hooydonk stated at the concept launch. “That is necessary because of those new players that are coming in. You know the debate that’s been going on: Oh, traditional OEM over 100 years old, can you make this step? We can and we want to.”
Neue Klasse vehicles are expected to be powered by 48-millimeter-diameter cylindrical batteries in different lengths. The batteries are similar in size and shape to those Tesla plans to use in its Cybertruck and other models. The Neue Klasse is targeting a 50% reduction in battery pack costs and 25% more range per kilowatt-hour, executives said.
“Neue Klasse is by far the biggest investment in our history. Because the technology we are using all over BMW is all new in all areas, without exception,” Frank Weber, BMW’s Chief Technology Officer, was reported to have said in an interview ahead of the IAA event.