BMW in talks with UK government over £75m grant for electric Mini | Economic news

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German car giant BMW is in talks with the government over €75m funding that would guarantee the production of electric Minis at its Oxfordshire plant.

Sky News has learned that BMW is negotiating with officials from the Department for Business, Energy and Industrial Strategy (BEIS) a grant from the Whitehall Automotive Transformation Fund.

Industry sources said a deal could be finalized between the government and the company within weeks.

One added that the package, which is believed to be worth up to £75million, appeared to have the backing of Grant Shapps, the business secretary, and Jeremy Hunt, the chancellor.

It was unclear on Saturday when the funding would be released and when the plant would start using it.

If a deal is finalized, it would give Britain’s car industry a boost weeks after it emerged the sector had suffered its worst year in terms of output since the 1950s.

In 2022, automakers produced just 775,000 vehicles, down nearly 10%, according to the Society of Motor Manufacturers and Traders (SMMT).

Supply chain issues such as component bottlenecks were a major factor in the decline, but the industry’s sluggishness was compounded by the recent collapse of Britishvolt, the young battery maker for electric vehicles.

The Financial Times reported on Friday that Recharge Industries, an Australian company, had been chosen by the directors as Britishvolt’s preferred bidder.

Production of the Mini at Cowley dates back to the 1950s and resumed under BMW ownership in the early 2000s.

Around 200,000 Minis are built in Oxford each year, around 80% of which are destined for export markets.

The factory employs around 4,000 people, easily making it one of the largest in Britain.

Nissan and Ford have both announced new investment in their UK facilities over the past year, with the latter saying in December that it would spend £150million at its Halewood plant in Liverpool to expand production of parts for electric vehicles.

BMW announced in 2021 that it would stop making the electric Mini in Oxford, adding last October that the UK factory would build the three- and five-door Mini Cooper hatchback models instead.

“In addition, the Mini Convertible will return to Oxford from 2025 – it is one of our most important cars and a global best-seller,” he said at the time.

“Electric MINIs – a hatchback and a small SUV – will begin production in China through our partnership with Great Wall and the electric Countryman will be built in Leipzig. [in Germany].

“Beyond that, we cannot go at this stage.

“Future production plans will be announced in due course.

“Oxford plays an important role in the production strategy of the BMW Group, with its high degree of flexibility, competitiveness and expertise and will remain at the heart of Mini production.”

A BMW spokesperson declined to comment on its funding talks with the government over the weekend.

A BEIS spokesperson said: “The UK is one of the best places in the world for car manufacturing.

“Investment through the Automotive Transformation Fund will develop a high value end-to-end electrified automotive supply chain in the UK, and this includes unlocking private investment in gigafactories.

“We are also working with industry through the Motor Council’s Skills Task Force to ensure the UK motor industry can support and develop the skills needed for sustained success.”

The government has not commented directly on discussions with BMW.

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