The electric vehicle game is certainly heating up with Mercedes-Benz announcing they’re expanding battery production to support Electric Vehicles.
Automakers building electric vehicles need to have a serious plan to source batteries to power their future vehicles. There are essentially two options available, buy them, or make them.
If you’re a company that believes battery chemistry can be a competitive advantage, then you’ll likely go for local battery production.
Mercedes-Benz admits batteries are an important success factor for their electric offensive and the key element to flexibly and efficiently meet the global demand for electrified vehicles.
The company is therefore focusing on establishing a global battery production network and is investing more than one billion Euros or $1.65 Billion in Aussie dollars. This serious investment will create 9 battery factories at 7 locations across Europe, North America and Asia.
Mercedes has actually been building batteries for some time for their hybrid vehicles and annual production will soon exceed half a million battery systems as the scale-out to include EVs.
It seems Mercedes-Benz’s understands electric vehicles are the future and are playing to win. While they already offer plug-in hybrids (EQ Power), they’re ready to migrate to fully electrically powered vehicles (EQ).
By the end of this year, Mercedes-Benz will offer five purely electric models as well as 20 plug-in hybrids. A few years from now, the company will have more than 10 EVs in series production. By 2030, the company wants plug-in hybrids or purely electric vehicles to account for more than 50% of its passenger-car sales.
Mercedes’ Kamenz plant in Germany has been making batteries since 2012, and the learnings there will help provide a blueprint for the plants in the future.
Battery manufacturing locations include Bangkok and Beijing while the next location to soon start battery production will be Jawor in Poland, followed by plants around Stuttgart as well as Tuscaloosa in the U.S.
This investment from Mercedes is the biggest rival to Tesla’s Gigafactory that we’ve seen outside China. Ultimately this is an investment that many automakers will need to make if they want to be around in the future.