A BMW 740i is parked via a remote control key fob by company representative Paul Daman during a demonstration of various brands of self-driving cars on Capitol Hill in Washington March 15, 2016. REUTERS/Gary Cameron

BERLIN (Reuters) - German luxury automaker BMW said on Friday it will spend over 100 million euros ($118 million) on a test track for self-driving and electric cars in the Czech Republic, as it expands its foray into alternative driving technologies.

The construction of BMW’s first vehicle testing project in eastern Europe will create several hundred jobs in the Czech Republic, where costs are lower than in neighboring Germany.

The project is due to go on stream at the start of the next decade, the carmaker said, confirming a Czech media report.

BMW-owned properties near its Munich headquarters, in France and in Sweden are no longer sufficient to accommodate the carmaker’s expanding tests of self-driving vehicles, it said.

The group, which also includes the Rolls-Royce and MINI brands, plans to introduce its first highly automated iNEXT model in 2021 and has teamed up with Intel, Mobileye, Delphi [DCLC.UL], Continental and Fiat Chrysler to develop a market for driverless vehicles.

It also plans to increase battery-powered offerings to 25 models by 2025, about half of which will be fully electric.

“Today, we are on the threshold of automated driving,” Herbert Grebenc, BMW’s head of real estate management said in written remarks prepared for delivery at a news conference in Prague. “This means making massive investments in our future.”

Projects at the 500-hectare (1,200-acre) Sokolov site near the German border, picked out of 82 potential locations, will include the testing of driver-assistance and braking systems, Grebenc said.

($1 = 0.8487 euros)