BMW will add battery production at new Hungary plant

BMW is doubling its investment at its Hungarian factory to 2 billion euros ($2.1 billion), adding a high-voltage battery assembly facility.

Locating the battery assembly at the Debrecen plant will help BMW streamline logistics for production of its next generation electric cars that will use the “Neue Klasse” underpinnings, the automaker said Friday.

Output for both cars and batteries is scheduled to start by the end of 2025.

The plant in Debrecen is central to BMW’s efforts to take on Tesla, which continues to dominate global EV sales.

With its new EV-focused platform, the automaker aims to cut cell costs by half and increase both range and charging speed by 30 percent compared to current models.

BMW CEO Oliver Zipse has said the automaker will initially focus the new architecture on full-electric models for the midsize premium segment such as the 3-Series.

BMW assembles batteries at three sites in Germany, as well as its U.S. Spartanburg site and its Shenyang plant in China, and will source battery cells in Europe from Chinese battery producers CATL and EVE.

In Debrecen, the battery cells will be assembled into a metal housing that is then integrated into the underbody of the vehicle.

Construction of the battery assembly facility, which will extend over roughly 140,000 square meters, has already begun.

Separately, CATL earlier signed a 7.3 billion euro deal for its second plant making battery cells in Europe, making Hungary an increasingly important hub for EV making in Europe.

The investment, the country’s biggest ever, is set to supply a range of automakers with plants in close proximity, including Mercedes-Benz and Stellantis.

CATL is already a supplier to BMW from a factory in Erfurt, Germany.

BMW had previously said it would spend over 1 billion euros on the Debrecen factory and ramp up to producing 150,000 cars a year. The plant will be the automaker’s first new factory in Europe in over two decades.

Reuters contributed to this report