Daimler may invest $47 billion in battery-driven electric vehicles

Mercedes-Benz maker Daimler plans to invest more than 40 billion euros ($47 billion) between 2022 and 2030 to develop battery electric vehicles (EVs), and be ready for an all-electric car market by the end of that period.

Outlining its strategy for an electric future, the German luxury carmaker said on Thursday it would, with partners, build eight battery plants as it ramps up EV production, and that from 2025 all new vehicle platforms would only make electric cars.

“We really want to go for it and be dominantly, if not all electric, by the end of the decade,” Chief Executive Ola Källenius told Reuters, adding that spending on traditional combustion-engine technology would be “close to zero” by 2025.

However, Daimler stopped short of giving a hard deadline for ending sales of fossil-fuel cars.

Some carmakers like Geely-owned Volvo Cars have committed to going all electric by 2030, while General Motors Co says it aspires to be fully electric by 2035.

“We need to move the debate away from when you build the last combustion engine because it’s not relevant,” Källenius said. “The question is how quickly can you scale up to being close to 100% electric and that’s what we’re focusing on.”

Daimler’s announcement comes just over a week after the European Union proposed an effective ban on the sale of new petrol and diesel cars from 2035, aiming to speed up the switch to zero-emission EVs as part of a broad package of measures to combat global warming.

Ahead of the EU’s announcement, carmakers had announced a series of major investments in EVs. Earlier this month, Stellantis said it would invest more than 30 billion euros by 2025 on electrifying its line-up.

Daimler said that as of 2025, it expects electric and hybrid electric cars to make up 50 per cent of sales, earlier than its previous forecast that this would happen by 2030.

The carmaker will unveil three electric platforms - one to cover its range of passenger cars and SUVs, one for vans and one for high-performance vehicles - that will be launched in 2025. Daimler is also acquiring British firm YASA Limited to help develop high-performance electric motors. The company said it would build out 200 gigawatt hours (GWh) of battery cell capacity. Four of its new battery plants will be in Europe and one in the United States.

Daimler said it would announce new European partners for its battery production plans soon.

The EU has been pushing hard to build out battery capacity to counter China’s dominance of battery production.

Rival Volkswagen AG plans to build half a dozen battery cell plants in Europe.

Daimler said that as part of its electrification strategy it would build a battery recycling plant in Kuppenheim, Germany, which would start operations in 2023.

The carmaker’s stock was trading up a little over 1 per cent after its announcement.

German luxury carmaker Daimler said Thursday it was investing 40 billion euros ($47 billion) in a full shift to electric Mercedes-Benz vehicles by the end of the decade.

“Mercedes-Benz will be ready to go all-electric within this decade,” the firm said in a presentation, although it did add the caveat “where conditions allow”.

The carmaker unveiled an ambitious strategy that would have an electric version of all models by 2025 and a pledge that all new car platforms would be electric-only from that date.

To enable its shift to electric vehicles Daimler said it plans to open eight battery production facilities and planned to use a common battery platform across more than 90 per cent of future vehicles.

“The EV shift is picking up speed — especially in the luxury segment, where Mercedes-Benz belongs,” Daimler CEO Ola Kallenius said in a statement.

“Our main duty in this transformation is to convince customers to make the switch with compelling products,” he added.

The company said it is aiming to boost efficiency across the board with the goal of providing a real driving range of over 1,000 km (620 miles) on a single charge.

A growing number of carmakers have unveiled plans to shift to electric vehicles, making it likely that the days of the internal combustion engine are numbered.

The EU signalled last week that it wants a ban on new petrol and diesel vehicles by 2035 to meet its target of reaching carbon neutrality by mid-century.