German automaker BMW will invest 800 million euros (about $866 million) in the central Mexican state of San Luis Potosí to produce batteries and electric cars, the company said on Friday.
The expansion is the latest push in electric vehicles from BMW BMWG.DE, which aims to have more than half of its car sales come from all-electric units by 2030.
Of the total funds, 500 million euros will go towards the lithium battery assembly center on the grounds of BMW’s current plant, which it estimates will have 500 new employees.
The other 300 million euros will go towards adapting and expanding the body shop to produce the “Neue Klasse” line of fully electric cars, and building a new assembly line to install the battery packs, he told Reuters. the head of the plant, Harald Gottsche.
Friday’s announcement marks the start of the “planning phase,” Gottsche said. “We will start building, building the extensions and the new battery assembly in early 2024 and start (starting) production (of electric cars) in early 2027,” he explained.
In total, around 1,000 new jobs will be created, BMW specified.
The automaker has reported other expansions of operations around the world in recent months, including a $1.7 billion investment in the United States and a €2 billion push to build an electric vehicle factory in Hungary.
The plant in Hungary has been billed as BMW’s first completely free of fossil fuels.
“We want to outperform the plant in Hungary, of course,” Gottsche said, adding that the plant in Mexico is increasing its on-site solar production and substituting natural gas for biomethane.
Mexico has also been increasingly committed to electric vehicles, and authorities say the country is on track to meet or exceed the goal of converting half of car production to electric by 2030.
While other industry leaders have questioned that goal, Gottsche asserted that BMW sales in Mexico were already 30% hybrid or fully electric. “We will need a lot more renewable energy” to make the switch, he estimated.
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