BMW dives into EVs but keeps the X crossovers rolling in South Carolina

GREER, S.C. — BMW U.S. manufacturing boss Robert Engelhorn is staring down a hairy challenge with global ramifications.

Engelhorn is orchestrating a $1.7 billion upgrade to bring the automaker's largest factory, near Spartanburg, S.C., into the electric era. At the same time, he must ensure the plant's global output of high-demand crossovers doesn't get gummed up in the process.

It's akin to upgrading an aircraft engine midflight.

The new investment is the largest single investment at the plant here, Engelhorn told Automotive News on the sidelines of an event attended by South Carolina Gov. Henry McMaster and U.S. Sen. Lindsey Graham.

The ambitious project will position the 30-year-old factory as a production powerhouse for next-generation BMW crossovers — a segment that has lifted the German marque to the top of the U.S. luxury sales charts for the past three years.

BMW Group CEO Oliver Zipse said the investment puts the South Carolina plant on the "EV map" and is "indicative of where the industry and BMW is headed."

BMW will invest $1 billion to retool the 7 million-square-foot factory to build at least six electric vehicles by 2030. An additional $700 million will go to create a battery pack assembly operation in nearby Woodruff, S.C.

At the same time, BMW has tapped battery supplier Envision AESC to build next-generation battery cells at a new factory in the state.

Engelhorn said the auto industry is undergoing its "biggest change in history" with a "full swing toward electromobility."

This investment, he said, lays the foundation for BMW's future.

As Engelhorn gears up U.S. operations for EV production, he will lean into his manufacturing experience in Germany and China. Before his U.S. tour of duty, Engelhorn prepped Plant Munich to produce the BMW i4 electric sedan.

A lot is riding on his shoulders as he readies for the next act.

With an annual capacity of 450,000 vehicles, BMW's U.S. factory currently exports about 60 percent of its volume.

"Plant Spartanburg has been a cornerstone of the global success of the BMW Group," Zipse said. "The 'home of the X' is also becoming the 'home of the battery-electric vehicle.' "

Production of BMW's Neue Klasse platform EVs will begin mid-decade in the 1.7 million-square-foot area called Hall 52 that currently assembles X3 and X4 crossovers. A separate assembly shop builds BMW's X5, X6, X7 and XM crossovers.

Retooling for EV assembly begins in 2024. An expansion will increase square footage of Hall 52 by about one-third and boost capacity by about 60 percent, to nearly 290,000 vehicles a year.

The production system layout is built for flexibility, Assembly Manager Johannes Zirngibl told Automotive News. "So if there is a higher market demand ... we could produce more volume," Zirngibl said.

BMW did not reveal which electric models it will build at the plant. But according to AutoForecast Solutions, commercial production of the battery-powered iX5 crossover should start in late 2026, followed by the iX7 a year later. Production of the iX6 and iXM crossovers could begin in 2028.

The assembly plant will be capable of building combustion engine models and fuel cell vehicles alongside EVs.

"Because we are delivering to the world, we have to cope with worldwide market" demand, Engelhorn said, noting the plant supplies 120 countries. "It is our duty to be reactive to customer demands."

Unlike some of its competitors that are pivoting fully to EVs, BMW anticipates demand for combustion engines will continue. The company expects only about half of its sales to be fully electric by the start of the next decade.

BMW is also exploring other technologies. It will begin limited production of a hydrogen fuel cell version of its X5 midsize crossover at the end of the year.

"We see an increase in the demand for electric vehicles," Engelhorn said. "But we also see a big demand in plug-in hybrids and sustainable combustion."

Beyond reengineering its assembly lines, BMW must train plant employees to build EVs, and it must hire 300 people to produce battery packs in Woodruff.

"There will be a lot of changes in the assembly line with regards to the electrified vehicles," Engelhorn said. "We need highly skilled work forces because this will be a highly automated production entity."

BMW has invested in a $20 million center to train employees to put together electric drivetrains and assemble high-voltage battery packs. Inside the 68,000-square-foot center, which includes a robotics training area, workers use augmented and virtual reality to learn advanced manufacturing techniques such as 3D printing and laser welding.

To build EVs locally, BMW is developing a regional supply chain.

"We have a clear shift toward the e-mobility components," Engelhorn said. "The majority of them we are manufacturing ourselves," including the e-motor and battery pack.

BMW will also lean on a network of suppliers, including Envision AESC, which will build a new generation of batteries for the automaker.

"We will have deeper localization in the U.S.," Engelhorn said.