Investment, production expansion reaffirms BMW's confidence in China

German automaker BMW announced an investment of 10 billion yuan ($1.39 billion) to expand its battery production facility in China, reaffirming its strong confidence in the Chinese market. This is another major investment from BMW to accelerate its electrification transition following the opening of the Lydia plant in Shenyang, Liaoning province, this June.

"Today's agreement signing is the latest demonstration of both our confidence in the Chinese market and our commitment to promoting cooperation between China and Germany," said Jochen Goller, president and CEO of BMW Group Region China.

This new extension project is located in the Sino-German (Shenyang) High-end Equipment Manufacturing Industrial Park in the Shenyang Economic and Technological Development Zone.

With the completion of its expansion, the high-voltage battery center will become the third global power battery center of BMW Group. In 2017, BMW Group established the center, which encompasses battery research and development, production and testing.

In June, BMW invested 15 billion yuan in its new Plant Lydia in Shenyang, mainly designed to produce the all-electric BMW i3, a mid-sized sports sedan. The Lydia plant will boost the annual output of BMW in China to 800,000 vehicles from 700,000 in 2021.

Since 2010, BMW has invested more than 83 billion yuan in Shenyang to build a production system integrating research and development, procurement, and powertrain and vehicle production, making Shenyang the world's largest production base for BMW Group, according to the company.

The past decade saw the huge success of BMW in China since the establishment of the BMW Brilliance joint venture in 2002. China's sales accounted for one-third of its global share in 2021.

Moreover, China has become the world's largest new energy vehicle market and the most important NEV research center in recent years.

According to data from the China Association of Automobile Manufacturers, China's new energy vehicle sales amounted to 3.521 million units in 2021, accounting for 53 percent of the global market share.

Li Hongbiao, a senior researcher at the China Academy of Northeast Revitalization, said Europe is facing challenges such as an energy crisis and regional conflicts, while China has cultivated its complete NEV industrial chain and supply chain with its advantages of technical strength and lower manufacturing costs.

Experts said China has gained competitive advantages in the middle and upper reaches of the new energy vehicle industry chain, especially when it comes to battery manufacturing, battery parts and battery metal processing.

On June 22, the executive meeting of the State Council clearly stated that China will continue to support purchases of NEVs by implementing policies such as tax exemptions.

In 2021, BMW's NEV sales in China reached 48,000 vehicles, with a 69.6 percent year-on-year increase.

By the end of 2025, BMW plans to deliver 2 million all-electric vehicles worldwide. By 2030, electric car production is expected to make up 50 percent of its global market.

Li Mofei contributed to this story.