- BMW plans to invest $1.7 billion in its U.S. operations to scale electric vehicle production, the company announced last Wednesday.
- The Germany-based automaker will spend $1 billion to expand its South Carolina plant for EV production. It will also spend $700 million to build a nearby battery factory in partnership with Envision AESC, which will supply round lithium-ion batteries for new EVs manufactured at the Spartanburg plant.
- The company aims to produce at least six fully electric vehicle models in the U.S. by 2030. The Spartanburg plant currently makes battery modules for its two BMW X plug-in hybrid EVs, according to the release.
BMW’s focus on shoring up its supply chains in South Carolina comes as more automakers commit to EV production on U.S. soil to qualify for consumer tax credits outlined in the Inflation Reduction Act.
However, EV final assembly in North America will not be enough to qualify for incentives come next year, when a battery provision takes effect. It stipulates that over 50% of a battery’s components must be manufactured or assembled in North America beginning in 2023, increasing 10% each year until 2028.
Several automakers including BMW have turned to joint ventures rather than rely on sourcing agreements to fulfill the battery provision. BMW is working with Japan-based battery maker Envision AESC to build a local battery factory that will supply Spartanburg with newly developed batteries for EVs.
The company said the partnership with Envision AESC is an important step in its plan to “strengthen its regional supply chains,” such as creating a new network of sub-suppliers and jobs in the area. Currently, the Spartanburg plant is supported by over 300 suppliers across the U.S., including more than 40 Tier 1 suppliers in the state.
BMW isn’t the only automaker establishing localized EV capabilities to ramp up production in line with their production targets.
Honda revealed plans for an “EV hub” in Ohio earlier this month, selecting a battery production site near facilities it will retool for EVs. Hyundai announced Tuesday it has broken ground on a campus where both batteries and a diverse line of EVs will be manufactured.