BMW is investing CNY 10 billion($1.42 billion) in Shenyang to build a battery plant for its next-generation Neue Klasse vehicles that will be locally produced from 2026, showcasing its commitment to the Chinese market.

The German premium carmaker announced the plan during its joint venture BMW Brilliance Automotive's 20th anniversary celebrations last week.

BMW said the site for its six-generation high-voltage batteries will cover 240,000 square meters, five times the size of the joint venture's existing battery assembly facilities.

To further prepare for the Neue Klasse vehicles' local production, a new extension of its Shenyang R&D Center was also opened during the anniversary event.

The expanded facilities are expected to further boost BMW's e-mobility development and validation capabilities in China, a place it considers to be a home away from home.

The announcements are a clear sign of the German car group's confidence in the Chinese market and its commitment to a win-win future with its local partners.

"The integration of the Neue Klasse into our production in China is combined with the construction of a high-voltage battery assembly site for our sixth-generation battery," said Milan Nedeljkovic, member of the board of management of BMW AG, responsible for production.

"This will make a significant contribution to the further electrification of our portfolio and thus our company's success," he said.

Nedeljkovic applauded the achievement of BMW's localization in China, saying that starting from a small assembly plant with just a few units 20 years ago, the company's plants in Shenyang have developed into the BMW Group's largest production site worldwide.

Walter Mertl, member of the board of management of BMW AG, responsible for finance, said the joint venture BMW Brilliance has been a key driver of the BMW Group's growth in China.

"Our successful partnerships with Liaoning Province as well as our many Chinese partners demonstrate how Sino-German partnerships can create shared prosperity," he said.

Founded in May 2003, BBA has been fundamental to the BMW Group's successful integration into the Chinese market, manufacturing most of BMW's models at its plants in Shenyang.

The carmaker said that since 2010, nearly CNY 100 billion has been invested in the BMW Shenyang Production Base and its projects, where the designed production capacity has risen to 830,000 vehicles per year.

In 2022 alone, BBA's purchasing volume in China exceeded CNY 73 billion, of which more than 60 percent was made in Liaoning. BBA has been the No 1 taxpayer in Shenyang for 17 consecutive years. Its tax payment in 2022 was around CNY 48.5 billion.

In China, the BMW Group has established its largest R&D and innovation network outside Germany, with locations in Beijing, Shanghai, Shenyang and Nanjing in Jiangsu Province.

This year marks the 10th anniversary of BMW's Shenyang R&D Center. The R&D work in Shenyang primarily focuses on the development, integration and validation of e-mobility technology, as well as product localization.

Last week, a large extension of the Shenyang R&D Center was opened, featuring 19 new test benches, 17 of which are for e-mobility related tests. This is expected to further support the ramp-up of electrification in China.

Besides R&D competence, the BMW Shenyang Production Base has built up strong e-mobility capabilities across purchasing, battery assembly and vehicle production.

In June 2022, the Lydia Site of Plant Tiexi started operations. It is the first newly built BMW plant since the global roll-out of the BMW iFactory production strategy, which aims to set new standards for automotive production based on the three manufacturing dimensions of lean, green and digital.

In terms of digital, BBA recently launched a new artificial intelligence platform named Beacon, which serves as a "super brain" for BMW operations in China.

With the platform, BMW's digital team can rapidly develop new applications based on requirements from business units, opening up new possibilities for digital innovation.

The company said more technology modules, including generative AI, blockchain, quantum computing, and multimodal fusion, will be integrated into the Beacon platform.

BMW is enriching its electric product offerings in China. Following the successful launches of the locally produced BMW iX3 and BMW i3, the carmaker will start producing the first-ever long-wheelbase BMW iX1 this year, as well as the first-ever long-wheelbase BMW i5 in 2024.

The all-electric Neue Klasse, which will start production in China from 2026, features a completely new IT architecture, a new high-efficiency electric drive and battery system and new standards in terms of circularity.

Besides its own footprints, BBA is helping forge a local supply chain. Statistics show that it has around 430 local suppliers in China, of which more than 120 are Liaoning-based, and nearly 100 are in Shenyang.

With the build-up of the industrial cluster, leading enterprises such as EVE and ZF have arrived or expanded their footprint in Shenyang.

As BMW ramps up its e-mobility efforts, the industrial chain will be expanded into new areas such as electrodes, electrolytes and diaphragms — all used in the production of high-voltage batteries.

Meanwhile, BMW is collaborating with partners across the entire value chain to explore and adapt new technologies and new business models that promote sustainability.

In 2022, BMW created the first closed loop for battery recycling in China with its partner Huayou. In the same year, the group announced contracts worth more than EUR 10 billion ($10.82 billion) with CATL, EVE and Envision AESC to produce high-voltage batteries.

On the journey toward e-mobility, BMW is supporting the development of its workforce by providing up-skilling and re-skilling opportunities.

In the last 5 years, more than 8,000 of its employees have been trained to work on electric vehicles.

The forthcoming battery plant will create around 2,000 new local jobs, around half of which will be internal transfers from re-skilled engine production workers.

Walter Mertl (left), member of the board of management of BMW AG, responsible for finance, and Milan Nedeljkovic, member of the board of management of BMW AG, responsible for production, attend BMW Brilliance's 20th anniversary news conference held in Shenyang on May 18. CHINA DAILY

BMW Brilliance has invested nearly CNY 100 billion in plants, facilities and projects in Shenyang since 2010. CHINA DAILY