BMW pauses £600mn investment plan to produce electric Minis in Oxford

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BMW has paused a £600mn investment plan to produce electric Mini cars in Oxford, putting the future of the historic plant under threat as the industry grapples with a slower than expected move away from petrol vehicles. 

The investment review comes as a further blow to the UK’s car industry following plant closures by Honda, Ford and JLR over the past decade. In November, Stellantis blamed the UK’s electric vehicle sales targets as it announced plans to shut its van factory in Luton, putting about 1,100 jobs at risk.

“Given the multiple uncertainties facing the automotive industry, the BMW group is currently reviewing the timing for reintroducing battery-electric Mini production in Oxford,” the German carmaker said in a statement.

Car companies have been putting pressure on the UK government to water down its EV targets, which require a certain percentage of each carmaker’s annual sales to be zero-emission vehicles. 

The level is set to rise from 28 per cent this year to 80 per cent in 2030, with companies facing fines of £15,000 for each missed vehicle. 

Sales of EVs are growing in the UK but remain below official targets, prompting carmakers such as Nissan to warn that jobs in the UK could be at risk unless the government relaxes its EV sales rules. 

According to its original plan announced in 2023, BMW had intended to manufacture two new electric models — the three-door Mini Cooper and the smaller Mini Aceman — at the site in Cowley, providing a lifeline to the factory by reducing its reliance on petrol cars, which the German group has aimed to phase out by 2030. 

The two models are based on a system developed by BMW and China’s Great Wall Motor. The fact that they are at present produced in China and sold in the EU means the models have also been hit by higher tariffs that Brussels imposed on Chinese EV imports in October.

Last year, registrations of new Mini cars in the UK fell 1.3 per cent from a year earlier to 46,975 vehicles, according to the Society of Motor Manufacturers and Traders. Data by Schmidt Automotive Research showed that 2024 registrations of electric Mini cars increased 4.9 per cent to 36,932 vehicles in western Europe, including the UK. 

The government last week ended its fast-track consultation with the auto industry on how to improve flexibility in the scheme to try to give manufacturers more breathing space. 

“We recognise the global challenges car manufacturers face and have listened to their concerns . . . while also protecting jobs,” said the Department for Transport. 

Following the consultation’s completion, Ford UK boss Lisa Brankin called for purchase incentives and other government support, warning that the “adoption of electric vehicles isn’t happening fast enough”. The US group last year announced 800 job cuts in the UK because of slower than expected EV sales.