23 July 2021
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3 min read
German auto giant confirms plans for a 'profound reallocation of capital' as it announces it is to invest £34bn and build eight gigafactories in support of its EV strategy
Mercedez-Benz has announced plans to go "all electric" by 2030, as it unveiled plans for eight new 'gigafactories' to make electric batteries for its zero emission fleet as part of a €40bn investment programme.
The German auto giant said that by next year it will have battery electric vehicles (BEVs) on offer in all segments the company serves and, from 2025 onwards customers will be able to "choose an all-electric alternative for every model the company makes".
The company says its all-electric strategy means it will be positioned to make the transition to zero emission models "where market conditions allow".
"The EV shift is picking up speed - especially in the luxury segment, where Mercedes-Benz belongs," said Ola Källenius, CEO of Daimler AG and Mercedes-Benz. "The tipping point is getting closer and we will be ready as markets switch to electric-only by the end of this decade. This step marks a profound reallocation of capital. By managing this faster transformation while safeguarding our profitability targets, we will ensure the enduring success of Mercedes-Benz. Thanks to our highly-qualified and motivated workforce, I am convinced that we will be successful in this exciting new era."
As well as increasing the firm's range of electric passenger cars, the strategy includes plans to launch purpose-made electric vans and Light Commercial Vehicles by 2025, which will "contribute to emission-free transportation and cities in the future".
The company is also planning to install 530,000 AC and DC Mercedes me Charge charging points worldwide, which it says will "introduce seamless charging without extra steps needed for authentication and payment".
The plans position the company at the more ambitious end of a range of recent commitments from car makers seeking to transition to EV fleets in the years ahead. General Motors and Jaguar Land Rover have plans to offer a zero emissions-only line up of vehicles by 2035 and 2036, respectively, while Bentley said its range will be fully electric by 2030.
The new electrification strategies come in response to both surging consumer demand for EVs and tightening regulations that are set to effectively ban the sale of petrol and diesel cars over the next 10 to 15 years. The UK has announced a ban on sales of new petrol and diesel powered passengers cars by the end of the decade, with plug-in hybrids to then be phased out from 2035. Similarly, the EU's recently announced new climate package proposes tightening emissions standards for new cars and vans over the next 15 years ahead of a de facto ban on new internal combustion engine cars and vans from 2035.
Mercedes-Benz said that to support its new strategy it will require battery capacity of more than 200GWh, which will be delivered by eight new 'gigafactories' that are set to be developed alongside the company's international partners. The new factories would come in addition to an already planned network of nine plants dedicated to building battery systems.
The firm said its next generation batteries will be highly standardised and suitable for use in more than 90 per cent of all Mercedes-Benz cars and vans while being flexible enough to offer "individual solutions to all customers".
Mercedes-Benz said it intends to team up with new European partners to develop and efficiently produce future cells and modules, a step which ensures that Europe remains "at the heart of the auto industry even in an electric era".
The new strategy will put "planning, development, purchasing and production under one roof", the firm said, including through the newly announced acquisition of UK-based electric motor company YASA, which has developed axial flux motor technology and expertise for the next generation of ultra high-performance motors.
The auto giant's electrification plans will also see greater investment in China - the world's largest EV market - which Mercedes-Benz said is "home to hundreds of companies and suppliers specialised in EV components and software technologies".
"The transition from internal combustion engines to electric vehicles is feasible and already underway," the company added.
