Daimler Will Invest Nearly $600 Million in French Electric Car Plant

The factory will build a compact model for Mercedes' EQ sub-brand.

Mercedes-Benz

Mercedes-Benz parent Daimler will spend around 500 million euros ($589 million) to expand an electric car factory in Hambach, France. The factory will build a compact electric car for Mercedes' new EQ sub-brand, one of 10 all-electric models the German automaker plans to launch by 2022.

Daimler currently builds electric versions of the Smart Fortwo in Hambach. The plant opened in 1997 and currently has over 800 employees, according to Daimler. The new investment will "expand the assembly facilities and reshape the site's infrastructure" to accommodate production of the electric Mercedes model, a Daimler press release said.

The electric car Daimler plans to build in France will likely be based on the Mercedes-Benz Concept EQA, which first appeared at the at the 2017 Frankfurt Motor Show. The compact hatchback concept had a claimed range of around 250 miles courtesy of a 60-kilowatt-hour battery packā€”the same size as the larger of the two Tesla Model 3 battery packs. Daimler recently filed a trademark application for the name "EQA" and numerous other EQ-based model names as it works to flesh out the new electric car sub-brand.

Taking a page from BMW and its "i" division, Mercedes and Daimler want EQ to be synonymous with electrification. Daimler has attached the name to the upcoming Mercedes Formula E team, and uses the label "EQ Power+" for the hybrid powertrains in Mercedes Formula 1 cars. The name originated with the Generation EQ electric SUV concept from the 2016 Paris Motor Show. A production version of the Generation EQ will likely go on sale before the French-built compact electric car.

Mercedes plans to launch more than 10 all-electric models by 2022, and plans to offer a hybrid or all-electric powertrain in every model by then. Smart will go all-electric by 2020. In addition to investment in the Hambach plant, Mercedes plans to spend $1 billion on upgrades to an Alabama factory in preparation for electric SUV production.