BMW AG (BMWKY) is preparing to launch production of its first US-built electric vehicle, even as parts of the auto industry pull back from aggressive EV plans. The German automaker said it will begin making the revamped X5 later this year at its Spartanburg, South Carolina plant, with the electric iX5 joining gasoline, diesel, fuel-cell, and other drivetrain options. The iX5 will start at just under $70,000 and could offer as much as 525 miles of range on a charge.
BMW's flexible drivetrain strategy could help the company navigate a softer US EV market, where policy changes have weakened federal support for battery-powered cars. Republican lawmakers eliminated the $7,500 federal EV tax credit last year, while the Trump administration has moved to ease fuel economy and emissions requirements. BloombergNEF now expects EVs to account for 17% of US auto sales in 2030, down from its 27% forecast last year and far below its 48% projection in 2024.
The Spartanburg launch marks the completion of BMW's $1.7 billion US investment that began in 2022, reinforcing the role of its largest global vehicle plant. The site produces about 400,000 cars annually and exports roughly half of its SUV output, which could possibly help cushion some tariff pressure. Still, BMW faces broader challenges after cutting its profit forecast earlier this month, pressured by weaker China demand, local competition from BYD Co. (BYDDY), inflation, and the impact of the war in the Middle East on consumer spending.