The first model in production at the Lydia plant is the i3, a full-electric sports sedan, BMW said, increasing the range of its EV models for Chinese customers to 13 next year.
Tesla and Chinese automakers such as BYD dominate China's booming EV market, with sales more than doubling from a year ago.
Meanwhile, legacy automakers that have relied on the internal combustion engine for decades, such as General Motors and Volkswagen Group, are falling behind.
Nearly a quarter of the cars sold in China in the first five months of this year were battery powered, according to data from the China Association of Automotive Manufacturers.
BMW’s China sales fell 9.2 percent to 208,507 in the first quarter, according to a company filing.
China is the largest market worldwide for BMW Group. In 2021, it delivered 846,237 vehicles under the BMW and Mini brands in China, an increase of 8.9 percent from a year earlier.
In 2018, the German luxury car maker signed a deal with Great Wall Motor Co., China’s largest light-truck maker, to establish a 50-50 joint venture to produce electric vehicles for Mini.
That partnership is slated to start production at a plant in the east China city of Zhangjiagang in 2023.
Reuters contributed to this report.