Finance

Mercedes helps build European battery factory of 7 billion

Mercedes-Benz wants all the cars it makes to be electric by the end of this decade. It is essential that you have batteries. Now almost all of them come from Asia. But Mercedes wants to become less dependent on other parties and produce its own batteries.

One step it is now taking to achieve that is to buy a third of the shares in ACC. The other shareholders of ACC are Stellantis (the maker of Peugeot, Citroën, Opel and Fiat, among others) and the French energy group Total.

More than double capacity

Now that Mercedes is also becoming a shareholder, ACC’s goal is to more than double production capacity, according to Mercedes. ACC first wanted to be able to produce 48 Gigawatt hours of batteries, but that will now be 120 Gigawatt hours. In addition to Mercedes, the batteries will also be for Stellantis brands.

From the middle of this decade, ACC will be able to supply batteries to Mercedes. ACC had already announced an investment in a battery factory in Germany for 2 billion euros. Production there will start in 2025. ACC also wants to build factories elsewhere in Europe, but nothing has been announced about this yet.

Knowledge and investments

Mercedes contributes knowledge of batteries and invests an amount of less than 1 billion euros. In the coming year this will be an amount of around 500 million euros.

In total, more than 7 billion euros must be invested in ACC. The French and German governments will also be responsible for some of this.

Mercedes: eight factories

Mercedes itself expects to need about 200 gigawatts of batteries by the end of this decade. The batteries will also come from manufacturers other than ACC.

For a long time Mercedes did not want to make batteries for electric cars itself, but under CEO Ola Källenius a different path has been taken. The group wants to build a total of eight factories for batteries, half of which are in Europe. Those factories will all be built with a partner.

Competition with Asia

According to Auke Hoekstra, researcher at Eindhoven University of Technology and specialized in electric driving, it is very important that European automakers work together on better batteries. “We have to compete against America and Asia, where they are way ahead. That’s why it’s important to join forces.”

Moreover, he says, batteries are hardly distinctive for most consumers. “A customer sees a whole car. If you just arrange the non-distinctive feature better with each other, you have a better competitive position.”

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