Mini could bring EV production to North America

Compact car maker Mini could bring electric vehicle manufacturing to North America as the British marque looks to expand its U.S. offerings cost competitively.

A Mini electric crossover could go into production at BMW's central Mexico factory in the second half of the decade, sources briefed on the plans told Automotive News.

The $1 billion plant in San Luis Potosi produces BMW's 2 and 3 Series sedans and will build the next-generation 3 Series electric sedan and iX3 electric crossover. One of the sources, who asked not to be identified, said that the new Mini model will share the same platform as the 3 Series EV and its crossover sibling.

It's unclear how far along Mini is in its decision-making regarding North American production. A spokesperson declined to comment.

If Mini were to pull the trigger, it would further diversify beyond its Cowley factory on the outskirts of Oxford, England.

The new Mini Countryman is due to begin production in Germany in November. Later in the year, Mini will start building EVs in China as part of a joint venture with Great Wall Motor Co.

Mini has capitalized on its British heritage, including a taillight design that carries the Union Jack motif.

The quirky automaker has struggled to find traction in the U.S. market in recent years, in part due to its lineup of small cars. But the brand is pivoting to larger crossover-type vehicles.

North American production of electric crossovers would solve a thorny problem for the brand in the U.S. — the 27.5 percent tariff Mini faces on every vehicle it might want to import from China.

Mini Americas boss Michael Peyton previously described the tariff issue as a "big deal."

To skirt Chinese tariffs, Mini seeks to diversify EV production beyond China, Peyton told Automotive News in late 2021. "There's already some potential to do something other than China," he said.

Dealer Nicholas Alexander said North America-made Minis would help lift the brand's awareness and competitiveness in the U.S.

Alexander, president of Nick Alexander Mini in Los Angeles, said the China-made EVs are "desperately needed here." But the import tariff "would make those models unsellable here," he added, noting it would tack nearly $7,000 onto the sticker price.

"China production immediately puts us from having a well-equipped, well-priced, well-loved car into something that's just out of people's price range," Alexander said. "So if they could move that production to North America, I'm all for it."

Moreover, under the Inflation Reduction Act, a Mini produced south of the border would qualify for up to $7,500 in federal tax credits available to North American-made vehicles.

"We'd have a huge pricing advantage in Mexico," Alexander said.

Alexander said he advocated for North American production with Mini's U.S. leadership last year,

"BMW has production facilities around the world," he said. "We need to utilize those."

North American production would allow Mini dealers to meet U.S. demand more efficiently.

"We can sell into the pipeline when we know the product is only a couple of weeks away instead of a couple of months away," Alexander said.

North American production would also help BMW increase utilization at an underemployed factory. The Central Mexico plant, which opened in 2019, operates at 32 percent utilization, according to AutoForecast Solutions.

In contrast, BMW's other North American factory in Greer, S.C., is at 99 percent capacity, cranking out the brand's high-volume and high-margin crossovers.

Mini plans to go all electric by the start of the next decade.

The automaker will bring two new electric models to market by mid-decade, and both models are built on electric platforms developed jointly with the Chinese automaker Great Wall.

According to media reports, Mini's next EV model — a two-door hatchback — will pack 40 kilowatt-hour and 54-kWh batteries and deliver up to 250 miles of range based on European testing standards.

A compact crossover that slots below the brand's bestselling Countryman crossover will follow.

Mini has teased the model with the Aceman, a four-door concept that seats five and hints at roomier Minis. Its two-box design with short overhangs maximizes interior roominess in a compact exterior footprint. Mini revealed an updated concept at the Shanghai auto show this week.