BMW Confirms iX3 EV Production in Mexico Starting 2027

BMW will move forward with plans to manufacture a new electric vehicle model in Mexico despite ongoing uncertainty tied to US trade policy under President Donald Trump. The German automaker confirmed it will produce the iX3, the first model in its Neue Klasse electric vehicle lineup, at its San Luis Potosi facility beginning in 2027. The plant is one of five worldwide selected to manufacture vehicles based on the new electric platform, alongside sites in Hungary, Germany, the United States, and China.

“Entering with the iX3 makes sense because the X1, Series 3, and X3 are very important models for Mexico and Latin America,” said Reiner Braun, president and CEO, BMW Group Latin America. “Having that model here allows us to keep supply and distribution close to the markets we serve from Mexico.”

BMW announced in 2023 an investment of €800 million (US$865 million) to prepare the San Luis Potosi plant for Neue Klasse production. The capital expenditure includes the development of a new vehicle architecture and the installation of a lithium battery assembly center. The company has identified the Mexican site as its second-most advanced manufacturing complex globally, behind only its facility in Hungary, which began operations in 2022 and has already started producing Neue Klasse vehicles.

“This is a new platform for 100% electric vehicles, and it will not be limited to one model,” Braun said. “A series of vehicles will be built on this platform, starting with the iX3. Hungary was first, followed by Germany, the United States, and Mexico, with China producing for its domestic market. Mexico will have the platform and the battery assembly for the iX3.”

BMW expects initial production from San Luis Potosi to serve both the domestic market and export destinations, with exports accounting for the majority of output. The company’s diversified export profile has helped shield its Mexican operations from tariff exposure that has affected other automakers more directly.

According to data from Mexico’s national statistics agency INEGI, BMW exported 91,490 vehicles from Mexico in 2025. Of that total, 42% were shipped to the United States, while the remainder was distributed across other global markets. Vehicles produced in San Luis Potosi are currently exported to approximately 80 countries.

Trade policy uncertainty has weighed on the automotive sector since Trump returned to the White House, with tariff measures aimed at strengthening domestic manufacturing creating cost pressures for companies with concentrated exposure to the US market. Several automakers operating in Mexico rely heavily on exports to the United States, leaving them more vulnerable to margin compression from trade-related disruptions.

BMW executives said the company’s geographic diversification has reduced that exposure. They added that Mexico’s efforts to broaden its trade relationships have helped preserve planning certainty for long-term investments, even as policy signals from Washington remain unpredictable.

The San Luis Potosi plant has grown steadily in importance since opening in 2019. Initial production focused on the BMW Series 3, followed in 2021 by the Series 2 Coupe, a model designed by Mexican automotive designer José Casas. In late 2022, BMW announced the facility would also assemble the M2, making Mexico one of only four countries producing vehicles from BMW’s high-performance M series, alongside two plants in Germany and one in the United States.

Braun said that while trade relations between Mexico and the United States remain subject to negotiation, the most disruptive phase of bilateral tensions has likely already passed. With the scheduled review of the USMCA approaching, he expressed confidence that both governments will prioritize economic stability.

“The United States is the most important market for Mexico, and the opposite is also true,” Braun said. “Both governments have an interest in maintaining strong economies. I believe we will see agreements this year that help create a more stable environment and support growth.”

Mexico is currently the world’s seventh-largest vehicle producer and one of the economies most deeply integrated with the United States. Industry analysts emphasize that the automotive sector operates through highly interconnected supply chains across North America. “Mexico is not an island,” said analyst Meschoulam. “Components can cross the US-Mexico border up to eight times before becoming a finished vehicle.”

Vehicle and auto parts exports from Mexico remained relatively stable in 2025, but pressure is building ahead of the USMCA review. Francisco González, president. National Auto Parts Industry association, said more than 80% of Mexican auto parts exported to the United States comply with existing requirements, but added that rising costs linked to procedures and trade friction are reducing competitiveness.

“The sector needs to arrive at the trilateral table with a common position,” González said. He noted that the industry has identified 11 priority issues for the agreement’s review, including administrative simplification and tariff elimination. “Without these adjustments, North America will lose competitiveness,” he said.

That position contrasts with recent remarks from President Trump, who in January downplayed the value of the trade agreement signed with Mexico and Canada in 2020. Trump said the pact offers “no real advantage” to the US economy and suggested that its continuation is optional for Washington, adding tension to a review process scheduled for July.

Automotive executives have countered that view, arguing the USMCA is a practical operating framework rather than a political instrument. Ford Motor Company CEO Jim Farley has the agreement is “crucial” to the industry, citing Ford’s integrated manufacturing footprint across the United States and Mexico.

In Mexico, these pressures are translating into structural adjustments. Nissan Mexicana announced it will shut down vehicle production at its Civac plant in Morelos by March 2026, consolidating manufacturing in Aguascalientes. Separately, General Motors announced a US$4 billion investment to expand capacity at three US plants, shifting part of Chevrolet Equinox and Blazer SUV production north beginning in 2027.