BMW to invest £500m in Oxford Mini factory upgrade

BMW is to announce a £500m upgrade of its British Mini factory after a deal with ministers as the Government scrambles to electrify the car industry.

The German company – which has owned Mini since 1994 – has secured £75m of public money for the overhaul of its plant in Oxford, following months of speculation over its long-term future.

The taxpayer contribution is out of the Government’s Automotive Transformation Fund (ATF), for companies that want to electrify or otherwise decarbonise their car building.

BMW said two years ago that it would stop making electric Minis in the UK, moving production to China. The facility was converted to making petrol models putting its future in jeopardy as countries around the world are set to ban petrol and diesel cars from 2030.

Its £500m investment will fuel speculation that BMW plans to restart electric production.

The rules of the £1bn ATF dictate that the Government’s investment must be used to expand and focus on battery production, electric motors, electricdrive trains or fuel cells.

With the collapse of Britishvolt, the only planned independent battery maker in the UK, the electric future of British carmaking has been thrown into doubt. Britain’s biggest carmaker, Nissan, has its own supply of batteries near its plant in Sunderland, but has warned that Britain’s shrinking car industry is threatening its supply of parts, posing a threat to the plant in the long run.

Carmaking last year fell 10pc to 775,000 cars, with exports down 14pc. That is less than half the number five years ago and the industry has struggled to recover post-lockdown.

Jaguar Land Rover has yet to secure a local battery supply. It is understood to be considering the UK as a site for a gigafactory, but wants a large capital injection from the Government as well as support for its steel business.

Luxury and sports carmakers such as Aston Martin and Bentley can import batteries without penalties. But Toyota and Mini, which with Nissan and JLR make most of Britain’s cars, have yet to unveil a local battery plant plan.

BMW said: “With its flexibility, competitiveness and expertise, the Oxford plant plays an important role in the BMW Group’s production network. For the next Mini generation, Oxford will produce the majority of Mini models, the Mini Cooper three-door and fivedoor models, as well as the Mini Convertible ... Any future production plans will be announced in due course.”

New electric Mini models including a hatchback and a small SUV are produced in China as part of BMW’S deal with big Chinese car firm Great Wall.