BMW has officially opened its new 15 billion yuan ($2.2 billion) plant in China as the automaker accelerates production of electric cars as it tries to catch up with Tesla and local competitors.
The Lydia plant in the northeastern city of Shenyang, Liaoning Province, is the company’s third vehicle assembly facility in China . It is also her largest single investment in the country.
The company said the plant is designed to be able to produce battery-only electric vehicles in accordance with market demand via its flexible manufacturing lines.
Together with the Tixi and Dadong factories, the Lydia plant plays an important role in accelerating the company’s electric vehicle production in China.
Production of the BMW i3 , the first all-electric mid-size sports sedan for the Chinese market, began at the Lydia plant in May. Next year, that increases the number of its electric models available to Chinese customers to 13.
“The expansion of our production footprint in China shows that we are preparing for further growth in the world’s largest electric vehicle market,” said BMW Group China President and CEO. We are confident of China’s long-term prospects. We are intensifying our efforts in the field of electronic mobility. We aim to have more than a quarter of our sales in China all electric by 2025. With the expansion and modernization of our production base in Shenyang, we are now ready to serve the growing market demand for electric mobility in China.
The Lydia factory is the company’s first fully planned and simulated factory in a virtual environment. Almost every detail of the entire production process was built using Epic Games’ Unreal Engine.
The integration of the virtual world with the real world shortened the planning time. It also allowed collaboration across time zones. He overcame the harmful effects of epidemics, which alone shortened the construction time of the factory by six months.
BMW increases its challenge to Tesla
According to data from the China Association of Automobile Manufacturers, a quarter of cars sold in China in the first five months of this year are powered by batteries.
Meanwhile, BMW sold 208,507 cars in China, its largest market, in the first quarter. It was down 9.2% from last year.
The latest plant raises the annual production capacity of the German automaker in China to 830,000 cars. Instead of 700,000 cars in 2021.
But the company has plenty of work to catch up in China, the world’s largest electric vehicle market. Sales there are dominated by US rival Tesla and domestic players such as BYD, backed by Warren Buffett.
Traditional foreign automakers including BMW and Volkswagen have fallen behind. But these companies are now ramping up production.
Volkswagen said in February that it would be able to build 1 million electric cars annually in China in 2023.
However, China’s automakers faced more challenges in the world’s second largest economy after the resurgence of the Corona virus in the past few months. This led to the closure of major cities, most notably Shanghai.
This has caused further supply disruptions. Tesla CEO Elon Musk said the tools needed for the company’s factories in Austin and Berlin are stuck in China.
He also added that manufacturers are losing billions of dollars right now because supply chain problems are hampering production.