A few days ago, BMW officially open its first electric vehicle factory in China. This will have cost 15 billion yuan, the equivalent of 2.1 billion euros. BMW intends to catch up with Tesla and the Chinese manufacturers who have specialized in electric vehicles.
BMW goes electric in China
Called Lydia, this new factory is located in the city of Shenyang, in the northeast of the country. This is BMW’s third factory in China, but it is the first to specialize in the manufacture of electric vehicles. This plant also represents German automaker’s biggest investment in China. The plant was designed to manufacture only electric vehicles as well as traditional combustion engines. Production of BMW’s i3, a fully electric mid-size sports sedan, even started a few days ago.
China presents its plan for digital governance amid authoritarianism
According to Jochen Goller, President and CEO of BMW Group China, “The expansion of our production in China shows that we are preparing for further growth in the world’s largest electric car market and that we are confident in China’s long-term prospects. We are stepping up our efforts as our analyzes show that by 2025 fully electric vehicles will account for a quarter of sales”. However, the reality is that BMW is behind in China. On this gigantic market, the largest in the world, its American rival Tesla has taken the lead.
The German wants to rub shoulders with Tesla and local manufacturers
European automakers, including BMW and Volkswagen, are lagging behind. They have understood this and it is for this reason that they are accelerating the pace. BMW’s latest plant brings the German automaker’s annual production capacity in China to 830,000 cars. According to Ralf Brandstaetter, the boss of Volkswagen Passenger Cars, BMW will be able to manufacture 1 million electric vehicles per year in China in 2023. Like the others, the German manufacturer must nevertheless comply with market rules and suffer from supply chain problems.
The lockdown of major Chinese cities in the spring of 2022, including Shanghai, has led to major disruptions in the market. In an interview published Wednesday, June 22, Tesla boss Elon Musk said the components needed to manufacture the vehicles at the company’s factories in Austin and Berlin, were stuck in China. According to him, these two factories “are currently losing billions of dollars because supply chain issues are hampering production”.