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December 11, 2018

Daimler buys EUR20bn worth of EV battery cells

Daimler is taking the next step in its its CASE corporate strategy by purchasing battery cells worth more than EUR20bn.

By Olly Wehring

Daimler is taking the next step in its its CASE corporate strategy by purchasing battery cells worth more than EUR20bn.

The company is also spending EUR10bn expanding the Mercedes-Benz Cars electric range and another EURR1bn on global battery production.

"With extensive orders for battery cells until 2030, we set another important milestone for the electrification of our future electric vehicles of the EQ product and technology brand. 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," said procurement chief Wilko Stark.

Suppliers are already producing battery cells in Asia and Europe and are continuing to expand in Europe and in the US.

Daimler purchases cells on the world market, saying this ensures the best possible technology and focuses on the core competence of battery assembly.

The global battery production network will eventually consist of eight factories on three continents. The first factory in Kamenz is already in series production and a second factory there will start series production at the beginning of 2019. Two more factories will be built in Stuttgart-Untertuerkheim, one at the company's Sindelfingen site and one each at the sites in Beijing (China), Bangkok (Thailand) and Tuscaloosa (US).

Local production of batteries is seen as an important success factor in Mercedes-Benz Cars' electric offensive and decisive for meeting the global demand for electric vehicles flexibly and efficiently.

Competences for the technological evaluation of cells as well as research and development activities will be consistently expanded. These include the continuous optimisation of the current generation of li-ion systems, the further development of cells bought on the world market and research of the next generation of so-called post-lithium-ion systems.

By 2022, the entire Mercedes range is to be electrified, with various alternatives available in every segment, from Smart to SUVs. There will be well over 130 variants from the 48-volt electrical system to EQ Boost and plug-in hybrids and at least 10 all-electric vehicles powered by batteries or fuel cells. By 2025, sales of battery-electric vehicles are to increase to 15%-25% of total unit sales – depending on individual customer preferences and the development of the public infrastructure.

A prerequisite for a supply contract with Mercedes-Benz Cars is consent to disclosure of the entire supply chain, right back to the mines. Essential elements of requirements for suppliers relate to working conditions and compliance with human rights. The direct suppliers undertake to firmly pass on and monitor Daimler sustainability standards within the supply chain. Responsibility for the procurement of raw materials for the production of battery cells lies with suppliers. Daimler does not leave its partners alone with this task and supports them with interdisciplinary teams.

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