BMW to Build Electric SUV in South Carolina in $1.7B Deal
BMW Group on Tuesday announced the completion of a $1.7 billion investment in its South Carolina operations, marking a major milestone in the German automaker’s electrification strategy and reaffirming its long-term commitment to U.S. manufacturing. At a “Home of X” event in Spartanburg, the company unveiled the fifth-generation BMW X5 and confirmed that the BMW iX5 will be the first fully electric BMW assembled in the United States, with production starting in late 2026.
A Decade-Spanning Commitment to U.S. Manufacturing
The investment, first announced in 2022, includes the expansion of BMW’s long-standing Plant Spartanburg and the construction of a new facility in Woodruff. Together, these plants form what BMW describes as an integrated network for X model assembly and electrification. By 2030, the company plans to assemble at least six fully electric BMW models in the U.S., supported by locally assembled high-voltage batteries from Plant Woodruff.
“When we announced our investment plans for South Carolina in 2022, we made a clear commitment to the future of the BMW Group in the United States,” said Milan Nedeljković, Chairman of the Board of Management of BMW AG, in a press release. “Today, we are delivering on that commitment. The completion of our investments in Plant Spartanburg and Plant Woodruff demonstrates our confidence in the United States and reinforces South Carolina’s role at the center of BMW Group’s global operations.”
Plant Spartanburg, established more than three decades ago, is BMW Group’s largest plant worldwide and serves as the global center of competence for BMW X models. Since 1994, more than 7.3 million BMW vehicles have been assembled there. In 2025 alone, 412,799 BMW X models rolled off the line, marking the seventh time the plant has exceeded 400,000 units in a single year.
The New X5: Five Drivetrains, One Platform
A centerpiece of Tuesday’s event was the world premiere of the fifth-generation BMW X5, which becomes the first vehicle in the industry offered with five distinct drivetrain technologies: internal combustion, battery electric, plug-in hybrid electric, diesel, and hydrogen fuel cell. Plant Spartanburg will be the first facility in BMW’s global production network capable of assembling a single vehicle model across all five drivetrain types on one assembly line.
“The new BMW X5 demonstrates our belief that innovation and customer choice go hand in hand,” said Sebastian Mackensen, President & CEO of BMW of North America, as reported by Fox Business. “Our customers both in the U.S. and around the world will love the new BMW X5 — and our technology-open approach puts them in the driver’s seat to enjoy the performance and premium experience that define BMW, regardless of which drivetrain they choose.”
This “technology-open” strategy differentiates BMW from automakers that are focusing exclusively on battery-electric vehicles, allowing the company to hedge against uncertain EV adoption rates and serve markets with varying infrastructure readiness.
Economic Impact and Export Leadership
BMW’s U.S. operations support more than 120,000 jobs nationwide and contribute over $43.3 billion annually to the U.S. economy, according to the company. Approximately half of Plant Spartanburg’s current production is exported to nearly 120 countries, making BMW the leading automotive exporter in the United States by value. To date, nearly 3 million BMWs have been exported from the U.S., valued at over $113 billion.
“The future of BMW X models will continue to be shaped in South Carolina,” said Dr. Robert Engelhorn, President & CEO of BMW Manufacturing Co. “From highly efficient combustion engines and plug-in hybrid systems to battery-electric and future hydrogen-powered vehicles, Plant Spartanburg will be able to assemble a broad range of drivetrain technologies for customers in the U.S. and around the world.”
Advanced Manufacturing and Battery Technology
Both plants incorporate elements of BMW’s iFACTORY production model, including AI-based quality controls, digital twins for process planning, and humanoid robots from Figure AI for physically demanding tasks. At Plant Woodruff, the company is deploying a “Cell-to-Pack” approach for high-voltage battery assembly, where cells are assembled directly into the housing without intermediate module production steps, as Quartz reported via Yahoo Finance.
The investment also addresses a key supply chain challenge. In June 2025, Automotive Energy Supply Corporation (AESC) halted construction at its planned $1.6 billion battery cell plant in South Carolina. To prevent bottlenecks, BMW arranged for AESC to supply cells from other factories while Plant Woodruff handles battery pack assembly.
What to Watch
With the iX5 set to begin production before the end of 2026, BMW is positioning itself as a major player in U.S. EV manufacturing. The company’s technology-open approach — offering customers a choice of five drivetrains in the same vehicle — represents a bet that the transition to electric mobility will be gradual and varied across markets. By 2030, at least six fully electric models will be assembled in the United States, though BMW has not yet specified which models beyond the iX5 will be produced domestically. The completion of this investment, coupled with recent European Parliament votes to cut duties on U.S. goods imports, positions BMW to navigate the complex landscape of global trade and electrification with unusual flexibility.