BMW’s electric future is taking shape on the outskirts of the Mexican city of San Luis Potosi, some 450 miles south of the U.S. border.
The five-year-old plant there is where BMW will make its faster-charging, longer-range and more high-tech next-generation of battery-powered vehicles, dubbed the “Neue Klasse,” or “New Class.” That starts in 2027. But preparations are already underway to expand the plant, add battery-pack production and start pumping out the new and critical models. I toured the sprawling facility and spoke with its president and CEO, Harald Gottsche, to get the lowdown on how Neue Klasse prep is going and what challenges lie ahead.
“Because this is our Gen6 battery production, it is the latest technology that we have. Lots of innovation. Lots of complexity,” Gottsche told InsideEVs. “So we prepare intensively already today for that.”
Today, BMW Plant San Luis Potosi pumps out some 450 2 Series coupes, 3 Series sedans and M2 coupes per day for the U.S. and global markets. It makes both plug-in hybrid and combustion models. Neue Klasse production, meanwhile, will start at a new plant in Debrecen, Hungary in late 2025 with a yet-to-be-revealed SUV model. (That’s also the model that will kick off Neue Klasse production in Mexico, BMWBlog reports.) The EVs will also be built in China for that market.
To bring EV production to San Luis Potosi, BMW plans to expand its assembly and logistics area by around 100,000 square feet and its body shop (where a car’s basic structure is made) by some 200,000 square feet. The pièce de résistance is a new 861,000-square-foot building for assembling battery packs that will power Neue Klasse vehicles.
Right now, that facility is merely a skeleton of steel beams. When operational, it will receive BMW-designed, cylindrical cells from AESC, a battery company that’s building a new factory in South Carolina to supply multiple BMW plants. Later on, the plant will also be supplied by the Chinese battery firm CATL, a BMW spokesperson said. BMW says the new cells will boost energy density by 20% and charging speeds by 30%.
BMW already sells several EVs—including the i7, i4, i5 and iX in the U.S. market—and has seen more success on that front than other legacy manufacturers. The Neue Klasse cars will debut a new-and-improved EV-only platform that may be key for keeping BMW competitive in the fast-moving EV industry. That’s especially key for the Chinese market, where BMW and other European brands are facing stiff competition from emerging homegrown rivals.
‘99.99999% Perfection’
One of the big manufacturing challenges, Gottsche explains, stems from the Neue Klasse’s novel battery pack design. Rather than make a battery out of several smaller modules, as it does for its current EVs, BMW will assemble hundreds of battery cells directly into a large pack. By adjusting how many cells a pack gets and how they’re arranged, BMW can produce packs with different capacities and voltages.
That design helps save cost and space, and eliminates a production step. But it also introduces complexity and leaves little room for error. The stakes are especially high given that a battery pack is by far an EV’s most expensive single component.
Every cell needs to be welded to the pack perfectly, Gottsche said. Just a few bad welds can render an entire pack unusable if those spots can’t be fixed on a second pass.
“You have one chance to rework it in line with a second weld spot. If that fails again, this pack of 800 cells is scrap,” he said. That’s thousands of dollars down the drain.
For that reason, BMW is investing in innovative welding techniques and ways to spot issues on the assembly line. It’s also introducing “a completely new level of quality control” for cell suppliers and for its own processes, Gottsche said. One hundred bad parts per million (PPM), a quality benchmark for other components, won’t cut it for batteries, he said.
“If you look at the battery pack, that is very expensive. You have to go way below that,” Gottsche said. “You really have to go to 99.99999% of OK parts. Otherwise, you have to pay for a lot of scrap.”
Evidently, Gottsche wants to avoid the kinds of process snafus that dogged the production of General Motors’ new “Ultium” battery packs for months on end.
To make sure everything goes as smoothly as possible come 2027, he has sent around 70 engineers, technicians and logistics specialists to help launch Neue Klasse production in Hungary, and also to absorb as much as they can about the new architecture and processes. Preproduction just began there, and Gottsche said the focus is now on ironing out the issues that “you don’t see after 50 cars, but maybe after 1,000.” Another 30 of his employees are deployed at Parsdorf, Germany, at BMW’s battery research and development facility.
By the second year of Neue Klasse production, the San Luis Potosi battery plant will be able to crank out roughly 140,000 battery packs annually across two shifts, a BMW representative said. As for vehicle production, the plan is to keep the single, snaking assembly line at San Luis Potosi, but add new sections for the Neue Klasse cars.
Why Mexico?
Why make the Neue Klasse in Mexico in the first place? BMW realized after the supply chain havoc of the pandemic years that it needs to have a manufacturing presence wherever it sells cars, Gottsche said.
“We have seen that two years ago with the global supply crisis that you cannot fully depend on global supply chains,” he said.
Plus, the plant is big, new and was conceived from the beginning with a wide-open “innovation area.” That turned out to be the perfect spot for a sprawling new battery assembly facility. The plant also operates with an eye towards sustainability, Gottsche said, so zero-emission cars are a good fit. The facility gets 13% of its energy from an onsite solar array and plans to double that.
The decision wasn’t all about taking advantage of U.S. EV tax credits that favor cars made in North America, he said. That may have been a wise move, as key EV policies in the U.S. could change radically depending on who assumes the presidency come January. Former President Donald Trump, for his part, has said he’d levy steep tariffs on cars made in Mexico. Whether any of that will come to pass remains to be seen, but it does leave BMW—and other manufacturers—planning their next moves carefully.
“Frankly, we have to be careful, because this investment overall is an 800 million euro investment,” Gottsche said, referring to the EV-related plant expansions. “And short-term policies are hard to depend investments on.”