Mercedes-Benz Breaks Ground on $560 Million Electric Car Battery Plant

The new German facility will greatly increase Daimler’s EV battery capacity.

byWill Sabel Courtney| UPDATED May 23, 2017 10:48 AM
Mercedes-Benz Breaks Ground on $560 Million Electric Car Battery Plant

Batteries for electric cars are becoming big business—and they require big factories to handle it. As part of its plans for a massive push into the EV market, Mercedes-Benz parent company Daimler AG has broken ground on a giant factory designed solely to crank out batteries for electric cars in forthcoming years.

The new factory in Kamenz, Saxony, represents a roughly €500 million investment (around $560 million at current exchange rates) for Daimler—half of the carmaker's planned billion-euro investment in battery tech worldwide. That, in turn, represents just a small piece of the company's planned $11 billion budget for electric vehicle development over the next five years

The new 50-acre, carbon-neutral facility sits near the company's existing battery plant; when it opens next year, it will quadruple the battery production space of the facility and double the current number of staff, creating more than 500 jobs. 

And Daimler needs all the batteries it can build. Mercedes intendeds to launch at least 10 purely-electric cars between now and 2022. The carmaker has created a new sub-brand, known as Mercedes-Benz EQ, that will specialize in selling EVs alone. The company revealed the first EQ model in show car form last fall, in the form of the Mercedes-Benz Generation EQ Concept—a midsized EV SUV making roughly 400 horsepower and offering a maximum range of roughly 310 miles.

In a sign of the importance of electric cars to the German automotive industry's future, chancellor Angela Merkel and local attended the groundbreaking ceremony, along with Daimler chairman Dieter "Dr. Z" Zetsche and a flock of other executives from the company. The German government has made battery-powered vehicles a cornerstone of its plans to build towards an environmentally-friendly future; according to a statement from the nation's deputy economy minister last year, Germany is seeking to ban new fossil fuel-powered cars from being sold in the country starting in 2030.