BMW’s CEO, Oliver Zipse, highlighted the automaker’s extensive U.S. manufacturing footprint as a critical asset in mitigating geopolitical and tariff risks during the company’s Q3 earnings call. With 65% of its U.S. vehicle sales locally produced, BMW is positioned to weather potential trade policy changes while eyeing growth in both combustion and electric vehicle (EV) markets.
Local Production: A Buffer Against Tariffs
BMW’s Spartanburg, South Carolina, plant—the company’s largest manufacturing site globally—anchors a network of 30 locations across 12 U.S. states. This expansive footprint, developed over three decades, has enabled BMW to produce the majority of its U.S.-sold vehicles locally, providing a natural hedge against international trade disruptions.
“We have a strong footprint there, which kind of protects us against anything which might happen on the geopolitical side,” Zipse said.
As U.S. manufacturers brace for potential tariffs, Zipse suggested that BMW’s local presence could even serve as a competitive advantage. “If you are a local producer with a local footprint, you are of course benefiting in case there is something changing on the tariff side,” he explained.
The strategy isn’t confined to the U.S. BMW employs a similar approach in China, producing 85% of its vehicles for local sale within the country, further diversifying its production resilience.
Driving Toward an Electric Future
In addition to bolstering tariff defenses, BMW is investing heavily in its U.S. EV production capabilities. The company has committed €1.7 billion ($1.8 billion) to convert the Spartanburg plant into a hub for battery-electric vehicle manufacturing. This transition aligns with growing consumer demand for EVs in the U.S., where BMW reported a 19.5% year-over-year increase in EV sales through October, representing 15.8% of its total U.S. sales.
Despite a slight Q3 dip in EV sales, Zipse expressed optimism, pointing to strong demand for SUVs like the X3, X5, and X7, all produced in Spartanburg. “We seem to have the right product portfolio on the combustion engine side as well as on the electric side,” he said. “In the United States, I would think we almost have a perfect setup for the time to come.”
BMW’s robust U.S. production strategy reflects the evolving dynamics of global trade and the accelerating shift to EVs. By building vehicles closer to key markets, the company not only navigates trade uncertainties but also responds more nimbly to regional consumer preferences. However, as competitors ramp up their own local manufacturing and EV offerings, maintaining this edge will require sustained innovation and strategic foresight.
