According to the BBC, automaker BMW plans to spend up to £600 million on its Mini plant in Cowley, close to Oxford.
The funds are anticipated to be used to set up the factory for the production of electrified vehicles in the future.
The government has provided BMW with assistance valued at £75 million.
At the Cowley plant, the first wave of electric Minis went on sale in 2019. The initial model was an adaptation of an existing design that used an electric motor and batteries to operate.
However, the company disclosed last year that a joint venture between BMW and Great Wall Motor would manufacture the bulk of its electric cars in China.
Leipzig, Germany, would be the location of one electric variant, the Countryman.
BMW argued that it was inefficient to produce both conventionally fueled and electric vehicles in the same plant at the time.
Furthermore, Oxford would continue to be the “home of the Mini,” and no employment would be lost, it was adamant.
The factory will eventually have to start producing electric cars again, though, if it wants to stay open after the sale of new non-hybrid petrol and diesel vehicles is scheduled to stop in 2030.
By 2030, all Minis will be electrified.
BMW refused to comment on any future production plans in a statement, but it claimed to have a “continuous and fruitful dialogue” with the UK government.
At a time when analysts have been doubting the future prospects of the British auto industry – with the industry experiencing significant change worldwide – a statement from BMW would be a positive move.
The Society of Motor Manufacturers and Traders said that in 2022, the number of cars made in the UK dropped to its lowest level since 1956.
Ford shut down its engine facility in Bridgend the year before Honda’s Swindon factory in 2021.
Britishvolt, which had intended to construct a “gigafactory” battery facility close to Blyth, entered administration in January.
Recharge Industries, an Australian company, purchased the business, but it is not anticipated that batteries for electric cars will now be its top concern.
However, some fresh investment is anticipated.
Ford is making a £380 million investment in its Halewood plant to equip it to produce electric car motors. With £100 million in government funding, Stellantis is preparing its Ellesmere Port factory in Cheshire to produce electric vehicles.
The construction of a gigafactory next to Nissan’s plant in Sunderland, where the electric Leaf is made, is also receiving a comparable amount of government funding.
However, a top Nissan executive issued a warning last month that continued government support and a decrease in manufacturing costs would be required to justify producing other electric models in this nation.
“The economics have to work,” said Ashwani Gupta, chief operating officer, to the BBC.
As conventionally powered models are phased out, the government is known to be eager for the UK to acquire a stake in the developing electric car sector.
The government’s Automotive Transformation Fund is where the £75 million that BMW is being offered originates from.
The government is also rumored to be in discussions with Tata, the parent company of Jaguar Land Rover, about a financing package for a potential gigafactory here.
Spain is reportedly also vying for that money, though.