Daimler and BAIC have announced a framework agreement to further deepen cooperation at their Sino-German production joint venture Beijing Benz Automotive.
The two companies pledged to jointly invest RMB5bn (EUR655m) in the production of battery electric vehicles (BEVs) under the Mercedes-Benz brand at BBAC's factory in Beijing which builds around two thirds of the cars Daimler sells in China, along with many of their engines.
The partners plan to produce BEVs by 2020 at BBAC, and to develop infrastructure to make battery cells, as well as research and development capacities.
Hubertus Troska, Member of the Board of Management of Daimler AG, responsible for Greater China, and Xu Heyi, Chairman of the BAIC Group, attended the signing ceremony held in Berlin.
"By 2025, [China] will [account for] a substantial share in global sales of Mercedes-Benz electric vehicles. Therefore, local production will be key to the success of our EVs and crucial to flexibly serving local demand for electric vehicles. With our planned localization of BEVs and batteries with Chinese cells, we are dedicated to strengthening the region as an innovation hub for the automotive industry," said Daimler China chief Hubertus Troska.
Last month, the partners signed a framework agreement on strengthening their strategic collaboration through investments for New Energy Vehicles (NEVs) in China. As part of the deal, Daimler would acquire a minority share in Beijing Electric Vehicle (BJEV), a subsidiary of BAIC Group.
Mercedes-Benz plans to launch 10 'electric' passenger cars by 2022.
Daimler estimates electric vehicles will account for between 15% and 25% of Mercedes-Benz sales by 2025.