BMW said Tuesday that it would begin producing electric vehicles in the United States by the end of the year, a contrarian move when many automakers are slowing investment in the technology.
The iX5, a midsize electric sport utility vehicle, which BMW unveiled Tuesday, will be the first new electric vehicle to roll off the assembly line at the German automaker’s factory in Spartanburg, S.C. By 2030, the company plans to produce at least six electric models at the plant, its largest outside Germany.
Other automakers have delayed or canceled electric vehicle projects in recent months and recorded multibillion-dollar losses as a result. They have been responding to weak U.S. sales after Congress eliminated subsidies for electric car purchases.
BMW exports about half of the vehicles it makes in Spartanburg, where it produced more than 400,000 vehicles last year. The South Carolina complex is the company’s main hub for producing the X5 and other sport utility vehicles.
Exports allow BMW to benefit from strong demand for electric vehicles in Europe, where they account for 20 percent of new vehicle sales. That compares with about 6 percent in the United States.
Sebastian Mackensen, the president of BMW North America, said the company needs to offer models that use a variety of technologies. “To be successful globally, we need this product mix,” he said in an interview Tuesday.
While electric car sales have slowed in the United States, he said, there is still significant demand.
“Is the U.S. on the forefront of adoption of electric drive trains? No,” he said. “Is it a growing part of the market? Yes. And we don’t want to lose out on that part of the market.”
BMW is not immune from the industry’s problems. This month the company warned that its profit for the year will fall short of earlier estimates, largely because of declining sales in China and the war in Iran, which has made some materials more expensive.
Still, the company is moving in the opposite direction of many of its competitors.
In March, Honda scrapped plans to build three electric models in the United States. The change led to $9 billion in restructuring charges and write-downs.
Last year, Ford Motor stopped producing its F-150 Lightning, closed a factory in Kentucky that made batteries for that pickup last year and booked a $19.5 billion hit to profit.
General Motors and Stellantis, the maker of Jeep and Ram vehicles, also revised their plans and booked losses on electric vehicles.
Unlike BMW, Ford, G.M. and Honda do not have a large enough presence in Europe to benefit much from demand for electric vehicles there.
But BMW is also hedging its bets in case demand for electric vehicles, which has been erratic, falls short of expectations.
The iX5 is an electric version of the popular X5 series of vehicles, which will also be available in gasoline, diesel and plug-in hybrid versions. BMW will produce all the variants on the same assembly line in Spartanburg, allowing it to adjust production according to demand.
BMW said it had invested $1.7 billion to expand the Spartanburg plant and to construct a battery factory in nearby Woodruff, S.C.
The investment, announced in 2022, is an expression of “our confidence in the United States and reinforces South Carolina’s role at the center of BMW Group’s global operations,” Milan Nedeljkovic, the company’s chief executive, said in a statement.
Robert Engelhorn, the BMW executive in charge of the Spartanburg plant, said it took four years to remodel the complex so that electric, plug-in hybrid, gasoline and diesel models could be built on the same line.
Cars that are offered in gasoline, hybrid and electric forms tend to be less efficient than vehicles that are designed to run solely on batteries. But that won’t be the case with the electric iX5, Mr. Engelhorn said.
Demand is too unpredictable for a carmaker to bet on any one technology, he said. The electric version will go on sale early next year.
If a factory can produce only electric vehicles or only fossil fuel vehicles, he said, “you’re always wrong with capacities.”
In the fall, BMW will begin selling a smaller electric S.U.V., the iX3, in the United States. That model, imported from Europe, is the first of several new electric cars that BMW is rolling out over a few years.
Mr. Engelhorn declined to say whether BMW would manufacture the iX3 in Spartanburg, but that would be a logical step for a S.U.V.-focused factory.
In a measure of BMW’s importance to the South Carolina economy, the event Tuesday was attended by Senator Lindsey Graham and Gov. Henry McMaster, both Republicans.
“We’re glad you’re here,” Mr. Graham said. “We want you to make money.”
Governor McMaster recounted how, in the early 1990s, one of his predecessors and the BMW chief executive at the time sketched out the agreement that brought the carmaker to Spartanburg on a cocktail napkin while relaxing next to the pool at the governor’s mansion.
Then he led the audience in a singalong of “Carolina in the Morning.”
