BMW announced a 650 million euro investment to transition its main plant in Munich to exclusively produce electric vehicles (EVs) by the end of 2027. This significant investment includes the construction of four new buildings, including a new vehicle assembly line and body shop. Additionally, BMW has relocated traditional engine manufacturing to Great Britain and Austria, resulting in the retraining or relocation of 1,200 employees. The move marks a historic moment as the company, which has been producing internal-combustion vehicles at the Munich site since 1922, shifts towards a future dominated by EVs.
Unlike some of its competitors, BMW has not set a definite target for ceasing the production of combustion engine cars. However, it faces the reality of European Union regulations that effectively prohibit the sale of new petrol and diesel cars in the bloc from 2035. To prepare for this shift, BMW anticipates that all-electric vehicles will account for a third of its sales by 2026, up from 15% in 2023.
In light of the industry-wide transition to EVs, BMW’s competitors, such as Mercedes-Benz and Volkswagen, have cautioned that EV sales are not progressing as quickly as anticipated. Economic pressures on consumers, combined with lingering supply chain challenges, have impacted the pace of EV adoption.
To strengthen its position in the EV market, BMW introduced its ‘Neue Klasse’ model at the IAA car show in September. This model represents a multibillion-euro effort to close the technology gap with competitors like Tesla and other EV manufacturers. The ‘Neue Klasse’ is expected to be produced at the Munich plant starting in 2026, alongside combustion engine cars. It will also be manufactured at BMW’s new plant in Debrecen, Hungary, as well as in Shenyang, China, and San Luis Potosi, Mexico. These strategic production locations will enable BMW to meet the global demand for electric vehicles while maintaining its position as a leader in the automotive industry.
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