BMW U-turns on plans to move electric Mini production from UK to China

BMW will unveil plans on Monday to build its next-generation electric Mini in Oxford after securing a government funding package, in a move that will secure 4,000 jobs.

The decision by the German carmaker to invest in the Oxford plant is the result of “extensive” engagement with the UK government, according to the business and trade department. It is understood the commitment was made after the government promised tens of millions of taxpayer funds.

It marks a reversal of fortunes for the UK, after BMW last year said it would make most of its electric Minis in China, citing difficulty in producing electric vehicles and cars with internal combustion engines at the Cowley plant.

The U-turn was hailed by government ministers including the chancellor, Jeremy Hunt, who said BMW’s investment was “a huge vote of confidence in this country as a global leader in electric vehicles”.

Hunt said: “This industry is motoring, creating thousands of jobs and powering our green transition.”

The government said BMW’s move represented a “multimillion-pound investment” but did not disclose a figure. The carmaker is expected to provide further details on the investment, including the total sum, later on Monday.

The business and trade secretary, Kemi Badenoch, was due to visit Oxford on Monday for the formal announcement, which the government said would take investment in the UK automotive sector to more than £6bn over the past two years.

The move represents the latest upturn in the outlook for Britain’s electric vehicle industry, which faced uncertainty with battery supplies and post-Brexit tariffs.

The Vauxhall and Peugeot maker Stellantis last week began to produce electric vehicles (EV) at its factory in Ellesmere Port, after a £100m investment that made the site its first to be dedicated solely to EVs.

The announcement also follows a £4bn investment from Tata to build a gigafactory in the UK supplying electric batteries, as well as £1bn from Nissan and AESC to create an EV manufacturing hub in Sunderland.

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The US carmaker Ford has poured £380m into its Halewood site, which will become the company’s first EV components facility in Europe.

Rishi Sunak said BMW’s investment was “another shining example of how the UK is the best place to build cars of the future”.

BMW declined to comment.