BMW confirms it will invest another US$1.4 billion in Chinese EV battery plant
- The German marque will expand the Lydia plant, which makes high-performance batteries for its i3 and iX3 series cars
- Oliver Zipse, BMW’s chairman, who accompanied German chancellor Olaf Scholz on his visit to Beijing recently, said China would continue to be one of the carmaker’s most important markets
BMW has confirmed that it will invest an additional 10 billion yuan (US$1.4 billion) towards increasing capacity at a battery plant in China’s northern Liaoning province.
The German marque said in a statement that it had signed an agreement with the local government to expand the Lydia plant, which makes high-performance batteries for its i3 and iX3 series cars.
The agreement, signed on Friday, comes barely a week after a visit by Olaf Scholz, the German chancellor, to Beijing. It has heightened expectations that more trade and investment deals between China and Germany will be concluded in the coming months.
Oliver Zipse, BMW’s chairman, who accompanied Scholz on the visit, said China would continue to be one of the carmaker’s most important markets.
Scholz’ visit on November 4 was the first by a leader from a major developed economy after Chinese President Xi Jinping secured an unprecedented third term as the Communist Party’s general secretary.
“Conventional luxury carmakers will expand aggressively into EVs because of their quick growth pace,” said Chen Jinzhu, CEO of Shanghai Mingliang Auto Service. “Electric cars developed by BMW and its global competitors are yet to be well received by Chinese drivers.”
Moreover, the accelerated pace of EV adoption in China poses another problem for these carmakers, which mainly manufacture conventional vehicles. China is the world’s largest EV market and could see sales of new-energy vehicles – pure electric, plug-in hybrid and fuel-cell cars – more than double to 6 million units this year, UBS analyst Paul Gong said in August this year.
By 2030, three out of every five new vehicles sold in the country will be powered by batteries, the Swiss bank forecast last year.
BMW delivered about 53,000 pure EVs to Chinese customers in the first nine months of this year, a year-on-year increase of 65 per cent. But it lags far behind Tesla, the runaway leader in China’s premium EV segment. Tesla’s Shanghai Gigafactory delivered 71,704 vehicles in October alone, according to data from the China Passenger Car Association.