According to sources, BMW is seeking to form a joint venture with Great Wall Motor in China in regards to electric vehicles. “We are in discussions with Great Wall about setting up a joint venture to produce cars in Changshu,” said an executive for BMW. The other source said this joint venture would only focus on the electric car industry.
Why China?
China has been getting a lot of investments and proposals from car manufacturers, specifically from Tesla, Ford, and GM, which have all announced electric vehicle production plans there. This can be attributed to numbers. For example, BMW sales in China increased by 11% last year while Mercedes-Benz had a 27% increase.
Possibility of Electric Mini Cooper
With BMW being known as a producer of luxury vehicles that always defy expectations, it is possible these electric vehicles will be sold under Mini. The possible reasons behind this are several. One of them is that it will be hard to beat Tesla in terms of cost-efficiency. Afterall, Tesla is promoting and producing a $30K luxury electric vehicle.
Another reason is BYD Auto and Damier (Mercedes) forming Denza on a joint venture, which is an auto manufacturer of luxury electric vehicles.
And last and probably the most plausible reason, regulations on joint ventures are loosening up because China has its sights on mass production of electric vehicles to make sure it reaches its goal of electric car sales to make up a fifth of the country’s total car sales by 2025.
BMW is already in a good position to initiate this joint venture as it already has one set up with Brilliance China Automotive Holdings of China. Establishing a joint venture with Great Wall is favorable because they have already have an arrangement for a secure supply of lithium, which is a mineral used to develop electric vehicles.
With the electric vehicle market technically still in its early stages it is no surprise BMW is being proactive and moving forward with business deals like these.