BMW Begins Construction Of Battery Facility In South Carolina

BMW's new EV battery facility will be located within close proximity to its Spartanburg manufacturing plant.

BMW Woodruff Plant Drawing

Andrew Lambrecht

By: Andrew Lambrecht

Jun 28, 2023 at 11:29am ET

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Last summer, all of BMW's electric and hybrid products qualified for the federal tax credit. Even if it wasn't the full $7,500 credit, some vehicles, like the 530e, could still be eligible for a $5,836 credit due to their lower battery capacity. However, with the Inflation Reduction Act, now only one BMW product qualifies for a portion of the federal tax credit, and that's the 2024 BMW X5 50e retaining a $3,750 credit.

The 2024 BMW X5 is currently produced at the firm's Spartanburg plant. Along with the X5, the factory builds the BMW X3, X4, X6, X7, and the eccentric hybrid XM. The latter would not qualify for any tax credit as its $159,000 tag would place it far above the $80,000 SUV threshold to qualify. BMW offers several fully-electric models like the i4, i5, i7, and iX, but none of which are produced here. However, that might change in the coming years.

Last fall, BMW CEO Oliver Zipse allocated more funds for its United States-based facilities, focusing on electrification. The German automaker announced one billion dollars in funds for preparing Plant Spartanburg for all-electric vehicle production and $700 million towards establishing a high-voltage battery pack assembly facility.

The latter portion of the money will go to Plant Woodruff, the firm's new battery assembly plant. Plant Woodruff will be one million square feet and produce battery packs for fully-electric X vehicles. To create the battery packs, BMW will work with AESC as a cell supplier.

AESC's cell facility will also be conveniently located in South Carolina. AESC's Florence plant will have an annual capacity of 30 gigawatt-hours. The new batteries aim to improve charging times and overall energy density. These battery packs will likely utilize an 800V system as part of the Neue Klasse platform.

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Both BMW and AESC broke ground for their respective facilities this June. The two facilities will aim to be as clean and energy efficient as possible. For example, BMW's Plant Woodruff will operate entirely on green energy, and the roof will eventually support solar panels as well as a management system for harvesting rainwater.

It'll be interesting to see which upcoming electrified BMW X models will enter production at the Spartanburg facility. With battery packs produced stateside, these vehicles will qualify for the IRA $7,500 credit.

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