BMW to build Megacity electric vehicles in Germany

"By producing the Megacity vehicle in Germany, the BMW Group is demonstrating a clear commitment to Germany as a high-tech location," Norbert Reithofer, chairman of BMW’s management board, said at a conference attended by Chancellor Angela Merkel and other VIPs.

The Munich-based automaker will invest 400 million euros, or $560 million, over three years to expand the plant and install machinery. The investment will create more than 1,000 jobs, including 800 in Germany, BMW said.

The prime minister of the German state of Saxony, Stanislaw Tillich, and Chris Gregoire, the governor of Washington, also attended the event.

The investments include a $100 million plant in Moses Lake, Wash., that will supply lightweight carbon-fiber components for the Megacity vehicles. A venture of BMW and SGL Group is building the U.S. plant.

BMW now builds BMW 1 Series compact cars and X1 compact SUVs in Leipzig.

It expects to start selling the battery-powered Megacity Vehicle in 2013, as part of a plan to reduce emissions while increasing overall sales. BMW aims to sell 2 million vehicles a year by 2020, up from an expected 1.4 million this year.

The Megacity vehicle’s name reflects the expectation that the biggest growth in all-electric cars will take place in the world’s biggest and most congested cities.

BMW said it would start producing an electric BMW ActiveE — a limited-series model based on the BMW 1 Series coupe — in Leipzig plant as early as 2011.

The ActiveE represents the automaker’s second step, after the Mini E, toward putting an emission-free electric vehicle into series production. Like the Mini E, the ActiveE will be available for lease only.

ActiveE, a converted 1-Series coupe with lithium-ion battery packs developed by BMW and its partners Samsung SDI and Robert Bosch.