BMW will invest more than £600m in its factories in Oxford and Swindon, a major boost to the beleaguered UK automotive industry in the race to secure its electric future. 

The German carmaker is preparing to build two new electric Mini models — the Cooper three-door and Aceman — at its Oxford plant from 2026, according to a statement published on September 11. 

“With this new investment we will develop the Oxford plant for production of the new generation of electric Minis and set the path for purely electric car manufacturing in the future,” Milan Nedeljković, member of the BMW management board in charge of production, said in a statement.

While BMW did not disclose the exact amount it was offered by the UK government, the Financial Times reported that the investment in the 110-year-old site in Cowley will be backed by £75m of UK taxpayers’ money. 

“Decisions about where new models are produced are competitive between manufacturing plants, and the UK government grant was vital to secure the positive business case for Oxford, compared with other possible European manufacturing sites,” says Martina Hatzel, a spokesperson for the production network of BMW Group.

The announcement comes as a vote of confidence in the UK’s struggling auto industry, which has seen production of passenger cars halve since the 2016 Brexit referendum. 

Until recently, the UK had lagged behind its European peers for investment into electric vehicles (EVs) after a number of major setbacks. These included the closure of Honda’s Swindon plant in 2019 and the collapse of former poster child battery start-up Britishvolt.

The UK has attracted more than $9.3bn worth of foreign investment pledges in the EV supply chain so far this year, higher than that of any other European country, according to fDi Markets data up to the end of July. India’s Tata Group said in July it would invest £4bn in a new 40GW battery plant in Somerset. 

The UK government has set aside £1bn in an attempt to stir up investment in batteries and attract new automakers, but none have yet decided to build in the UK. The country’s existing automakers Nissan and Stellantis have committed to invest in their respective plants in Ellesmere Port and Sunderland.

The Oxford plant will initially import batteries for the electric Minis from outside the UK. Ms Hatzel says: “In principle our aim is to source the battery cells close to where the production is.” 

At its Oxford plant, BMW plans to produce around 200,000 cars per year in the medium term. Mini internal combustion engine models — the three-door, five-door and convertible — will be produced on the same production line from 2024. The German carmaker’s Oxford plant will only produce EVs by 2030.

Kemi Badenoch, the UK’s business and trade secretary, hailed BMW’s investment as a “big vote of confidence” in the UK economy and said it would secure high-quality jobs. BMW employs 3400 people at its Oxford Mini plant and around 600 associates at its metalworks plant in Swindon.