A new manufacturing plant for “premium e-batteries” and electric vehicles is to be built in Beijing by Germany’s Daimler and its Chinese joint venture (JV) partner BAIC.
Daimler and BAIC intend to jointly invest a total of CNY5 billion ($736.6 million) in the production of Daimler’s Mercedes-Benz brand battery electric vehicles (BEVs) at the plant, which will be operated by the firms’ Beijing Benz Automotive Co., Ltd., (BBAC) JV.
The investment total includes “a three-digit million euro” portion for battery production, Daimler said. Local production of battery-powered vehicles is scheduled to start by 2020.
Daimler said the initiative would be the first time its batteries have also been produced outside Germany.
The cells for the new plant’s batteries will be from China and the facility itself “will combine newest industry standards, latest production facilities” and fourth-generation technologies, Daimler said.
Markus Schaefer, a member of the Mercedes-Benz divisional board for cars, production and the supply chain said: “Building another premium e-battery factory is the next step in the implementation of our electric strategy”.
“The local production of batteries is crucial in order to meet the demand for electric vehicles flexibly and efficiently,” Schaefer said.
Daimler’s Greater China chief Hubertus Troska said: “By 2025, the Chinese market will have a substantial share in sales of Mercedes-Benz electric vehicles. Therefore, local production will be key to the success of our EV portfolio and crucial to flexibly serving local demand for electric vehicles.”
BAIC chairman Xu Heyi said: “By confirming our joint commitment to the development of electric drive in China, and undertaking preparations to produce BEVs at BBAC, we are giving full play to the respective strengths of both sides and laying the groundwork for BBAC to become a future BEV production hub in China.”
BBAC has been producing Mercedes-Benz cars since 2005 and engines since 2013. In 2016, more than two-thirds of all Mercedes-Benz products sold in China were produced locally, Daimler said.
Overall, Daimler said it is investing around EUR1bn ($1.1bn) in the global production of batteries, “estimating that by 2025, electric vehicles will account for between 15-25% of the total unit sales of Mercedes-Benz”.