BMW: Munich Main Plant Goes "Electric" - So Do the Others

After the surprising announcement by BMW CEO Oliver Zipse that the company will now develop a drivetrain primarily tailored to electric power, the company has now announced initial location details. The main plant in Munich will therefore give up the production of combustion engines and take over the production of the electric driveline. Production Director Milan Nedeljkovic has announced plans to build a production line costing 400 million euros by 2026, which will primarily focus on e-drives, based on future e-vehicle architecture.

By 2021, the production chief aims to have permanently reduced fixed costs by half a billion euros per year. The fully electric i4 and the SUV iX are then expected to start production in Dingolfing, and the electric versions of the 7 Series and 5 Series BMWs are also ready to start in Lower Bavaria. In 2022, the X1 will start in Regensburg, to be offered as a fully electric model in addition to the combustion engine. Finally, in Leipzig, the Mini Countryman will follow in 2023, available as both a combustion engine and electric vehicle. In the Far East, a pure electric Mini plant in cooperation with partner Great Wall is planned to be operational by 2022. The plants are expected to be able to flexibly vary the different powertrains.

Getting down to business: Battery production should also develop quickly

At the same time, the BMW Group is expanding its capacities for the production of electric drives. The company is investing in production facilities for the highly integrated e-drive and high-voltage batteries of the fifth generation at the e-drive production competence center in Dingolfing. Production facilities for battery modules and high-voltage batteries are also currently being set up at the Leipzig and Regensburg sites, with production scheduled to start in 2021. In parallel, the company is increasing production capacity for e-drive housings at the Steyr plant.

The new platform is said to be suitable for combustion engines but tailored to the requirements of electric drives. The production of combustion engines will therefore be concentrated in Upper Austrian Steyr and the English plant at Hams Hall, which are reportedly working at full capacity.

"We are still investing in combustion engines. It will take years before we no longer have combustion engines," Nedeljkovic reaffirmed in line with statements by Oliver Zipse at the Süddeutsche Zeitung economic summit.

However, it is no longer about defending the combustion engine, that time has passed, Zipse explained. The company still maintains a "technology-open approach," considering country-specific customer preferences, from combustion engines to plug-in hybrids, battery electric, or fuel cell vehicles. Zipse could still resonate with VW boss Herbert Diess's idea of making Germany the lead market for e-mobility.

By the end of 2022, each of the German plants will produce at least one fully electric vehicle, the production director added. The affected 1,000 employees in Munich will be gradually retrained and deployed in Munich or other plants. The new platform will first be used in the future Hungarian plant in Debrecen.

Works Council: "Model for a successfully managed transformation"

From the perspective of works council chief Manfred Schoch, the measure is a "model for a successfully managed transformation in the German industry." One can also secure industrial jobs within a major city if the transformation is approached strategically and boldly, Schoch said to news agencies.

The manufacturer also emphasizes the improved sustainability of its production. Since 2006, resource consumption and CO₂ emissions in vehicle production have been reduced by 50 percent, putting the company in a significantly better position compared to European manufacturers. By 2025, CO₂ emissions per vehicle are to be reduced by another 40 percent compared to 2019, and by 2030 by 80 percent.

“Sustainability is a fundamental component of a modern production. This year, we will source 100 percent of the electricity for our plants worldwide from renewable energy sources," emphasized Milan Nedeljković.

Each location would use the best available options – from solar energy in Oxford, Mexico, and China, to biogas in South Africa, and wind power in Leipzig.