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BMW has halted a £600m overhaul of its Oxford Mini factory amid sluggish electric vehicle (EV) sales, throwing the future of the site into doubt.
The German carmaker confirmed on Friday night that it was “reviewing the timing for reintroducing battery-electric Mini production in Oxford” in light of challenges facing the broader automotive market.
BMW announced plans in 2023 to invest £600m upgrading the Mini factory so that it could produce electric versions of the iconic cars. The deal included £75m of taxpayer support, with production set to start from 2026.
At the time, the investment was seen as a victory for British industry amid concerns that production could be permanently shifted overseas.
BMW switched production of electric Minis to China two years ago, saying that its UK factory needed “renovation and investment”.
The delay to the production plans, which was first reported by Auto Express, raises questions over the future of the site.
BMW had planned for the Oxford factory to produce only electric vehicles by 2030. The factory, which has operated for over a century and employs 3,100 people, currently makes combustion engine cars, which will be banned from sale in the UK by 2030 under government plans.
BMW said: “Plant Oxford is at the heart of Mini production, manufacturing and exporting a range of models which are sought after in the UK and around the world.
“However, given the multiple uncertainties facing the automotive industry, the BMW Group is currently reviewing the timing for reintroducing battery-electric Mini production in Oxford.”
It comes after BMW submitted a lengthy response to a government review of the zero emission vehicle (ZEV) mandate, which threatens carmakers with hefty fines if they do not meet set targets for EV sales.
The industry has complained that the sales targets are too ambitious and do not reflect the true level of demand among drivers.
A source told Auto Express: “We don’t believe mandates will create demand for products. [We’d like to see] a broader approach strengthening consumer confidence.”
Bosses from 10 carmakers, including BMW, last autumn wrote to Rachel Reeves, the Chancellor, urging ministers to increase subsidies for EVs or row back on the “flawed” sales targets.
They warned that the ZEV mandate would risk jobs and investment in the UK.
A senior UK automotive source blamed the BMW’s decision to pause investment into Oxford on sluggish EV sales across Europe and concerns about the battery supply chain. They claimed it was a “Europe issue, not just a UK one”.
Oliver Zipse, BMW’s chairman, warned last October that electric vehicle mandates “could threaten the European automotive industry in its heart”, adding that “with today’s assumptions, [it will] lead to a massive shrinking of the industry as a whole”.