BMW is in talks with the UK government for a £75million grant for an electric Mini | business news

German car giant BMW is in talks with the Government over a £75million financing package to secure production of electric Minis at its Oxfordshire plant.

Sky News has learned that BMW is negotiating with officials from the Department for Business, Energy and Industrial Strategy (BEIS) for a grant from Whitehall’s Automotive Transformation Fund.

Industry sources said a deal between the government and the company could be finalized within weeks.

One added that the package, which would be valued at up to £75million, appears to be backed by both Grant Shappsthe business secretary and Jeremy Huntthe Chancellor.

As of Saturday, it was unclear when the funds will be released and when the facility will begin use.

If a deal goes through, it would give a boost to the UK auto industry weeks after it was revealed the sector had its worst year in terms of production since the 1950s.

2022, The automakers only produced 775,000 vehiclesa plunge of nearly 10%, according to the Society of Motor Manufacturers and Traders (SMMT).

Supply chain issues such as component shortages were a key factor in the decline, but the gloom surrounding the industry was compounded by the recent collapse of Britishvolt, the fledgling electric vehicle battery maker.

The Financial Times reported on Friday that Recharge Industries, an Australian company, had been selected by administrators as Britishvolt’s preferred bidder.

Production of the Mini at Cowley dates back to the 1950s and resumed under BMW ownership in the early 2000s.

Around 200,000 Minis are built in Oxford each year, of which around 80% are destined for export.

The plant employs around 4,000 people, making it one of the largest in the UK.

Nissan and Ford both announced new investments in their UK plants last year, with the latter saying in December it would spend £150m at its Halewood plant in Liverpool to expand production of electric vehicle parts.

BMW announced it would end production of the electric Mini in Oxford in 2021, adding last October that the UK plant would build the Mini Cooper three-door and five-door hatch models instead.

“In addition, the Mini Cabrio will return to Oxford from 2025 – it is one of our most important cars and a worldwide bestseller,” it said at the time.

“Electric MINIs – a hatchback and a small SUV – will begin production in China through our partnership with Great Wall, and the electric Countryman will be built in Leipzig [in Germany].

“We can’t go beyond that at the moment.

“Future production plans will be announced in due course.

“Oxford, with its high level of flexibility, competitiveness and know-how, plays an important role in the BMW Group’s production strategy and will remain at the heart of Mini production.”

A BMW spokesman declined to comment on funding talks with the government this weekend.

A BEIS spokesman said: “The UK is one of the best locations in the world for car manufacturing.

“Investment by the Automotive Transformation Fund will develop a high quality end-to-end supply chain for electrified automobiles in the UK and this will include unlocking private investment in gigafactories.

“We are also working with industry through the Automotive Council’s Skills Working Group to ensure the UK automotive industry can support and develop the skills needed for sustained success.”

The government did not comment directly on the talks with BMW.