Domestic lithium-ion battery manufacturing has received quite a shot in the arm in 2022. In May, the Department of Energy announced it would spend $3 billion to increase battery-making here in the US. But perhaps more consequentially, in August the passage of the Inflation Reduction Act now ties an electric vehicle's tax credit to local battery production. As a result, automakers have been scrambling to build new battery factories in North America.
Now BMW is the latest OEM to join the list. On Wednesday, BMW Chairman Oliver Zipse announced that the company, which wants to have sold 2 million EVs by the end of 2025, is going to invest $1.7 billion in US EV manufacturing. $1 billion of that will be used to build out EV production lines at BMW's factory in Spartanburg, South Carolina. The remaining $700 million will go toward a new battery assembly plant in Woodruff, South Carolina.
And BMW also announced a partnership with Envision AESC, which is going to build a lithium-ion cell-manufacturing plant with an annual capacity of 30 GWh/year, also in South Carolina. BMW says that this plant will produce newly developed round cells, specifically designed for BMW's sixth-generation EVs. (The recently introduced iX and i4 are its fifth-gen EVs.)
The new cells will have 20 percent higher energy density and should charge 30 percent faster than BMW's current high-voltage lithium-ion, and it says it plans to cut carbon emissions from cell production by 60 percent via greater use of recycled materials and renewable energy.
In a statement, Zipse said:
"For decades, Plant Spartanburg has been a cornerstone of the global success of the BMW Group. It is the home of the BMW X models that are so popular all over the world. Going forward, it will also be a major driver for our electrification strategy, and we will produce at least six fully electric BMW X models here by 2030. That means: The 'Home of the X' is also becoming the 'Home of the Battery Electric Vehicle.' In addition, we can showcase BMW Group’s 'local for local' principle: Our newly developed sixth generation battery cells, which were specifically designed for the next generation electric vehicles, will be sourced here in South Carolina—where X goes electric."
Currently, the BMW factory in Spartanburg builds 11 different models and will add the new hybrid XM to the list later this year. The company plans to add the electric iX5 to the roster before the end of 2026, the iX7 a year later, and then the iX6 and iXM in 2028.
"This is a very important step for Plant Spartanburg as we continue our legacy of producing high-quality vehicles, and build on the success of the last 30 years," said Robert Engelhorn, president and CEO, BMW Manufacturing Co. "With this latest investment, we futureproof our operations and prepare the plant for electrification and new technologies, ensuring both the long-term success of our company and our position as an attractive and viable employer in the state of South Carolina."
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