BMW opens $2.2 billion EV plant in China as it challenges domestic players Tesla

German automaker BMW is ramping up production of electric vehicles in China as it tries to catch up with domestic rivals such as leaders Tesla and BYD. The new plant in Shenyang is BMW’s third plant in China and brings its annual production capacity in the country to 830,000 cars.

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bmw China has officially opened its new 15 billion yuan ($2.2 billion) factory with a strong focus on electric vehicles as it tries to catch up with leaders Tesla and domestic competitors.

The Lidia plant in the northeastern city of Shenyang is BMW’s third plant in China but its largest investment in the country.

The factory’s capacity can only be used to manufacture electric vehicles as well as conventional combustion engines.

BMW’s i3, the company’s first all-electric mid-size sports sedan for the Chinese market, began production at Plant Lydia in May.

“The expansion of our production footprint in China shows that we are preparing for further growth in the world’s largest electric car market and are confident in China’s long-term outlook,” Jochen Golar, President and CEO of BMW Group in China, said in a press release. Huh.” Release on Thursday.

“We are stepping up our e-mobility efforts, aiming to make more than a quarter of our sales in China all electric by 2025.”

But BMW has some grip on China, the world’s largest electric vehicle market, where US rivals Tesla and domestic players like Warren Buffett-backed BYD dominate sales,

Foreign traditional automakers, including BMW and Volkswagen, have been left behind. But now they are increasing the production. BMW’s latest plant in China brings the German automaker’s annual production capacity to 830,000 cars.

Volkswagen Passenger Cars CEO Ralf Brandstetter told Nikkei in February that the automaker will be able to manufacture one million electric vehicles a year in China by 2023.

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Nevertheless, automakers in China, already grappling with global supply chain issues, have faced further challenges in the world’s second-largest economy in the past few months following the resurgence of Covid-19. Caused the lockdown of major cities, especially Shanghai.

This has created further disruption in supply. In an interview published on WednesdayTesla CEO Elon Musk said equipment needed for the company’s factories in Austin and Berlin is stuck in China. He said both factories are “losing billions of dollars right now” because supply chain issues are hampering production.