BMW Will Invest Roughly $870 Million in Mexico to Promote Electric Vehicles

BMW announced Friday that it will invest 800 million euros ($866 million) in the central Mexican state of San Luis Potosi to manufacture high-voltage batteries and completely electric "Neue Klasse" models.

The expansion is BMW's latest push into electric vehicles (EVs) as it seeks to convert more than half of its sales to all-electric cars by 2030, according to the company.

More than half of the money to be invested in Mexico - 500 million euros - are allocated for the battery assembly center on the carmaker's existing factory grounds, BMW said, and around 500 new employees will work there.

Another 500 jobs will be generated in other areas, it claimed.

The remaining 300 million euros would go to upgrading and extending the body shop and developing a new assembly line to install the battery packs, factory chief Harald Gottsche told Reuters.

"We will begin construction of the extensions and new battery assembly at the beginning of 2024, and production will scale up at the beginning of 2027," he explained.

The news follows several other significant expansions by the manufacturer in recent months, including a $1.7 billion investment in the United States and a 2-billion-euro attempt to construct an electric vehicle (EV) facility in Hungary.

The factory in Hungary has been touted as BMW's first to be fully free of fossil fuels. Gottsche noted that the Mexico plant was in the process of growing its on-site solar production and switching to biomethane from natural gas.

"Of course, we aim to surpass the Hungarian plant," Gottsche remarked.

The drive comes as global industries comply with stricter environmental laws to reduce their impact on climate change.

Mexico's goal is to convert fifty percent of its car manufacturing to electric vehicles by 2030, and the country's campaign for EVs has intensified.

Despite the fact that several industry executives have cast doubt on this objective, Gottsche stated that 30% of BMW's sales in Mexico were already hybrid or fully electric.

"We will need significantly more renewable energy" to make the transition, said Gottsche.