Daimler's $23B Should Buy A Lot Of EV Batteries

 

Mercedes Benz Concept EQDAIMLER

While automakers are getting good at building their own electric vehicle battery packs, the ingredients for those packs – namely the all-important cells – still need to come from somewhere. Daimler announced today that it would be buying 20 billion euros ($22.6 billion U.S.) worth of battery cells, because that’s what it takes to reach the company’s goals of having 130 electrified variants of Mercedes-Benz cars by 2022, along with electric vans, buses and trucks.

“With extensive orders for battery cells until the year 2030, we set another important milestone for the electrification of our future electric vehicles of the EQ product and technology brand,” Wilko Stark, member of the divisional board of Mercedes-Benz Cars, procurement and supplier quality, said in a statement. ”In this way, together with our partners, we ensure the supply of our global battery production network today and in the future using the latest technologies.”

The suppliers Daimler is buying these battery cells from are already producing battery cells in Asia and Europe, with the U.S. coming in the future. The plan is for Mercedes-Benz Cars to build EV batteries in eight factories on three continents, with the first one, in Kamenz, Germany, already up and running and another coming online there in the summer of 2019. Three more plants will be opened in Germany as well as one in China (Beijing), one in Thailand (Bangkok), and one in the U.S. (Tuscaloosa). Daimler says that local battery production, “is an important success factor in Mercedes-Benz Cars’ electric offensive and is decisive for meeting the global demand for electric vehicles flexibly and efficiently.”

Daimler says that this massive purchase is an example of its CASEcorporate strategy, which stands for “Connected, Autonomous, Shared, Electric.” Daimler is also spending 10 billion euros ($11.3 billion) on its various electric vehicles (the Concept EQ is shown above) and a billion euros ($1.3 billion) on battery production worldwide. 

Last month, Volkswagen said it would invest $50 billion in electric vehicles.