German automaker BMW BMWYY has started production at a new $2.24 billion electric vehicle plant in Shenyang, China, as it looks to take on Tesla Inch TSLA and other fast-growing local EV rivals.
What Happened: The company confirmed on Thursday that its third car assembly factory in China, Lydia, was up and running to lift its annual output in the country to 830,000 this year from 70,000 in 2021.
“The expansion of our production footprint in China shows we are preparing for further growth in the world’s largest electric car market and are confident in China’s long-term perspectives,” said Jochen GoalsPresident & CEO of the BMW Group Region China.
“We are stepping up our e-mobility efforts, aiming for more than a quarter of our sales in China to be all-electric by 2025.”
Lydia is BMW’s largest project in China that houses all four major production processes: a press shop, body shop, paint shop, and assembly shop.
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Why It Matters: China is a key market for legacy players including Volkswagen Group VWAGY who are looking to take on EV leader Tesla as well as Chinese players such as Warren Buffett-backed BYD Co. BYDDY, Nio Inc. NIO.
BMW aims to lower carbon emissions through a vehicle’s life cycle by 40% by 2030 compared to 2019, which includes an 80% carbon reduction at the production level.
BMW said it began production of its new i3, an all-electric midsize sports sedan for China, in May. The $52,000 car competes with the Tesla Model 3. The German automaker aims to have 13 electric models on sale in the Chinese market by next year.