Industry Cuts Back on EV Investment... BMW Alone Expands U.S. Production

[Financial News, New York = Lee Byung-chul] BMW is moving into full-scale electric vehicle (EV) production in the United States. While major automakers have been scaling back EV investment plans one after another after the U.S. government scrapped EV subsidies, BMW is taking the opposite bet by expanding production. The company plans to turn the U.S. into a global EV production base, backed by strong demand in Europe.
BMW said on the 30th local time that it will begin producing electric vehicles at its Spartanburg plant in South Carolina starting late this year.
The first model to be produced will be the iX5, a midsize electric Sports Utility Vehicle (SUV). BMW plans to produce six EV models at the plant by 2030.
The Spartanburg plant is one of BMW's largest production bases outside Germany. It produced more than 400,000 vehicles last year, with about half exported overseas. It also serves as a key hub for SUV production, including the X5.
BMW plans to export vehicles made in the United States to Europe to meet rising EV demand. In Europe, about 20% of new car sales are electric vehicles, while the figure in the United States is only about 6%, showing a sharp difference in market conditions.
BMW's decision stands in stark contrast to its rivals. After the U.S. Congress abolished EV purchase subsidies, EV sales in the U.S. market slowed, prompting automakers to cut back investment.
Honda scrapped a plan in March to produce three EV models in the United States, and the move resulted in $9 billion in restructuring costs. Ford Motor Company also recorded a $19.5 billion loss last year after halting production of the Ford F-150 Lightning electric pickup truck and closing its Kentucky battery plant.
Unlike its rivals, BMW is seen as well positioned to benefit from rising EV demand because of its strong exposure to the European market. Ford Motor Company's market share in Europe is below 3%, Honda's is below 1%, and GM is selling Cadillac EVs only on a limited basis in Europe.
BMW is not going all in on EVs alone. The iX5 is the electric version of the existing X5, but gasoline, diesel and plug-in hybrid electric vehicle (PHEV) models will also be produced. BMW plans to manufacture all models on the same production line and flexibly adjust the production mix depending on market demand. In the long term, it also plans to add hydrogen fuel cell models.
For this project, BMW invested a total of $1.7 billion to expand the Spartanburg plant and build the nearby Woodruff battery plant.




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