BMW pauses £600m investment as EV demand falls

BMW Group has paused its planned £600m investment in the Mini assembly plant near Oxford due to falling demand for electric vehicles.

The German automaker, which has owned Mini since 2000, initially announced the investment in 2023 to upgrade its Cowley plant for electric vehicle production. Supported by government funding, the project was expected to secure 4,000 jobs.

However, BMW is now reviewing its plans for battery-electric Mini production at the site, citing multiple uncertainties in the automotive industry. In a statement, the company reaffirmed Plant Oxford’s importance in Mini manufacturing and exports, adding that much of the investment was still moving forward, including a new state-of-the-art logistics facility.

BMW has informed the UK government of its decision to reassess the timeline and has opted not to accept the previously announced grant. The company emphasized ongoing discussions regarding its future plans.

For now, the Oxford plant will continue producing petrol-powered Minis. Although the facility, employing 4,500 people, is set to transition to electric-only production by 2030, the investment delay raises concerns about its future and means BMW will face import duties for a longer period.

Originally, production of the electric Mini Cooper and Mini Aceman crossover SUV was scheduled to begin in 2026 after a deal—brokered by Rishi Sunak’s government—secured £60m in taxpayer subsidies to keep manufacturing in the UK rather than moving it to China.

The current Labour government has revived Boris Johnson’s original plan to ban new petrol and diesel car sales by 2030. Car manufacturers now face strict electric vehicle sales quotas, with non-compliance penalties reaching up to £15,000 per car. The 2024 target required 22% of new car sales to be electric, rising to 28% this year.

Despite these mandates, consumer demand for electric vehicles has slowed due to concerns over charging infrastructure and high transition costs.

A Department for Transport spokesperson acknowledged the global challenges faced by car manufacturers and reaffirmed the government’s commitment to supporting the industry. The UK is investing over £2.3 billion to accelerate the switch to electric vehicles, aiming to create high-paying jobs, strengthen its clean energy sector, and drive long-term economic change.