Mercedes-Benz to Build 8 Battery Factories

Mercedes-Benz's Transition to All-Electric Vehicles

Mercedes-Benz announced a substantial investment of €40 billion ($47 billion) on Thursday, outlining a strategy to transition to an exclusively electric vehicle manufacturer by the end of the decade.

This ambitious undertaking necessitates increased vertical integration within the company, comprehensive workforce training programs, and the secure procurement of sufficient battery supplies to power its future vehicle lineup.

Flexibility in the All-Electric Goal

While aiming for a complete shift to electric power, Mercedes acknowledges potential market variations. The company stated it will be “ready to go all electric by the end of the decade, where markets allow.”

Consequently, some vehicles with combustion engines, already incorporating 48-volt mild hybrid technology, may continue to be manufactured and sold beyond this timeframe.

Leadership in the Electric Revolution

“We have a very clear plan to rapidly scale BEVs; we want to get on this journey to a BEV (battery electric) only world,” stated Ola Källenius, CEO of Daimler AG and Mercedes-Benz AG, during a press conference following the announcement.

“Our intention is to actively drive this transformation, rather than simply adapting to it. We firmly believe that the luxury vehicle segment, where Mercedes-Benz operates, is ideally positioned to lead this transition.”

Strategic Acquisitions and Battery Capacity

The company has already begun taking concrete steps, including the acquisition of U.K.-based electric motor firm YASA on Thursday.

Mercedes-Benz has also determined a requirement for battery capacity exceeding 200 gigawatt hours. To fulfill this demand, the company intends to establish eight new battery plants in collaboration with current partners and one new partner, focused on cell production.

Global Battery Production Network

These new facilities, including one planned for the United States, four in Europe, and three in China, will complement the company’s existing network of nine factories dedicated to battery system assembly.

Specific locations for the U.S. plant, referred to as a “gigafactory,” have not yet been disclosed, but will be situated near existing vehicle assembly plants. Mercedes-Benz currently operates a vehicle assembly plant near Tuscaloosa, Alabama, and a battery plant nearby is nearing completion.

Strengthening European Automotive Leadership

Mercedes-Benz plans to collaborate with new European partners to develop and efficiently produce advanced battery cells and modules.

This strategic focus on European partnerships is intended to ensure the region “remains at the heart of the auto industry.”

Collaboration for Enhanced Battery Technology

The company is partnering with Sila Nano, a Silicon Valley battery materials startup, to enhance the performance of its next-generation batteries.

Sila Nano’s expertise in silicon-carbon composite anodes will contribute to increased energy density, resulting in extended driving range and reduced charging times.

Exploring Solid-State Battery Technology

Mercedes-Benz is also actively investigating solid-state battery technology and engaging in discussions with potential partners to develop batteries with even greater energy density and improved safety characteristics.

Building on Previous Electrification Goals

This new plan builds upon previous objectives to expand the availability of electric vehicles. In 2017, Mercedes-Benz announced its intention to offer electrified versions – including gas-hybrids, plug-in hybrids, and battery electrics – across its entire lineup by 2022.

The company confirmed on Thursday that it will provide battery-electric vehicle options in every segment it serves by next year.

Accelerated EV Adoption and Sales Targets

The transition to an all-electric lineup will accelerate further. By 2025, the company’s three newly developed vehicle architectures will be exclusively electric.

Mercedes-Benz anticipates that electric and hybrid vehicles will account for 50% of its total sales, a significant increase from its previous projection of 25%. Customers will have an all-electric alternative available for every model offered.

Capital Reallocation and Profitability

Källenius emphasized that this goal represents a “profound reallocation of capital.” He assured stakeholders that the company’s profitability targets will be maintained despite this substantial investment and the shift away from internal combustion engines.

New Electric Vehicle Architectures

To achieve this transformation, Mercedes-Benz is introducing three dedicated electric vehicle architectures. The MB.EA platform will serve as the foundation for medium to large passenger cars, while AMG.EA will underpin its high-performance Mercedes-AMG vehicles.

The VAN.EA architecture will be specifically designed for electric passenger minivans and light commercial vehicles. The company’s compact car architecture, MMA, which prioritizes electric powertrains, is slated for launch in vehicles by 2024.