BMW AG (ETR:BMW) has confirmed a £600 million investment in its Cowley plant in Oxford that produces Minis.
The German group had originally planned to shift most of its production of electric vehicles to China as part of a joint venture with Great Wall Motor, but now Cowley will produce Mini EVs as well.
Dr Milan Nedeljkovic, board member at BMW, said: “We have decided to manufacture the new generation (of Mini cars) here in Oxford since this is the home of Mini, and we are looking forward in an optimistic way.”
Production of two new electric-powered Mini models, the Mini Cooper and the larger Mini Aceman will be built at Cowley alongside fossil-fuelled cars.
BMW said a third Mini EV model, the Countryman, will be made in Germany.
Ian Plummer, commercial director of Auto Trader, said the deal was “a desperately needed stake in the future of the electrified car market”.
The UK government’s Automotive Transformation Fund is reportedly putting in £75 million to help pay for the plant’s upgrade.
Rishi Sunak said BMW's investment was "another shining example of how the UK is the best place to build cars of the future".
BMW is one of a stream of car makers to have announced new investments in the UK car industry in recent weeks.
Jaguar Land Rover's owner, the Indian group Tata, is to build a gigafactory to produce batteries in Somerset.
Vauxhall owner Stellantis is producing electric vans at its Ellesmere Port factory in Cheshire; Nissan is expanding its output of EVs at its Sunderland factory, while Ford is investing heavily in its Halewood plant.
Kemi Badenoch, government secretary for business and trade, has welcomed the deal claiming it is a huge success considering “the headwinds that the car industry is facing”.
“You look at the disruption to supply chains, you look at the increase in energy costs because of Russia’s war in Ukraine - we need to make sure that we don’t just sit back and allow the industry to wither,” she revealed to BBC Radio 4.