BMW will build a $1.7 billion EV battery factory in South Carolina

BMW says it will make batteries for its electric vehicles at a factory in South Carolina in the latest move by a major automaker to localize EV production in the United States.

The German company plans to invest $1.7 billion in the US, including $1 billion for EV production at BMW’s Spartanburg plant and $700 million for a new battery-assembly facility in nearby Woodruff.

By 2030, BMW says it will have at least six electric models in production in the US. Establishing a US-based EV plant will allow BMW’s upcoming line of plug-in vehicles to qualify for the federal EV tax credit.

BMW said it is partnering with Envision AESC on its plans for a dedicated battery plant in South Carolina. The Japan-based energy company will produce round lithium-ion battery cells specifically designed for BMW’s next-gen EV platform. When it’s completed, the battery factory will have an annual capacity of 30 gigawatt-hours (GWh).

BMW has also announced plans to build EV production facilities in Europe and China to meet demand. The company currently has several electric models for sale, including the i4 sedan and iX SUV.

The auto industry’s shift to EV production and the newly passed tax credit have led to a boom in new battery factories in the US. Most of the new facilities will be located in southern states, leading some to call the region the “Battery Belt.”

Localizing battery production in the US is important for automakers that want to qualify for the $7,500-per-vehicle tax credit, which requires EVs to be assembled in the US. Foreign automakers have expressed concerns that the new tax credits could discriminate against companies without US-based manufacturing facilities — but they’ve also begun to make moves to localize production in the US.

Ford has said its three new battery plants will enable 129GWh a year of production capacity. General Motors is planning four new battery factories in the US with LG Chem for a total annual capacity of 140GWh, while Volkswagen is aiming to have six battery cell production plants operating in Europe by 2030 for a total of 240GWh a year. Stellantis is planning a new factory in Indiana, which will have an initial annual production capacity of 23GWh. Hyundai and Honda have also announced US-based factory plans.

Globally, battery production is expected to grow from 95.3GWh in 2020 to 410.5GWh in 2024, according to GlobalData, a data and analytics company.