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Mercedes-Benz Invests $598 Million in Hambach Plant to Expand EV Production

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【Summary】By 2022, the company plans to roll out more than 10 EV models, across multiple segments – from compact EVs to electrified SUVs.

Michael Cheng    May 23, 2018 8:10 AM PT
Mercedes-Benz Invests $598 Million in Hambach Plant to Expand EV Production

Mercedes-Benz is taking a huge step in solidifying its EV production goals. The leading car manufacturer announced a massive $589 million investment for its Hambach plant, which currently produces compact, smart EVs under Daimler (parent company of Mercedes-Benz and Smart).

The injection of new funds will be utilized to kick start production for Mercedes-Benz's own EV. Many speculate that the announcement could be related to its highly anticipated EQ sub-brand of electrified units. Unveiled in 2016, the futuristic lineup consists of the unreleased Mercedes-Benz EQC SUV and the EQA.

Scaling EV Production

In preparation for the new EVs, the Hambach manufacturing facility will receive several upgrades. According to the auto company, a cutting-edge body shop and surface treatment center will be constructed in the location. Moreover, parts of the building where assembly is conducted will also be expanded to cater to new production flows.

"Now we take the next step and for the first time in our more than 100-year old history we bring the production of Mercedes-Benz to France. With the compact EQ model from Hambach we continue our electric initiative," said Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars.

At the moment, the Hambach plant is being used to manufacture the Smart EQ fortwo coupé and the Smart EQ fortwo cabrio. Interestingly, the facility observes sustainable energy practices, which leverages renewable energy systems for power. The location employs roughly 800 workers.

Mercedes-Benz has close ties with the government of France, as it has been operating in Hambach for more than seven years. The auto giant has established a handful of projects in the area, such as Smartville – a joint venture between the business and Swiss watch maker Swatch.

10 EVs by 2022

During the announcement, the automaker took the time to reiterate its plans for the EV sector. By 2022, the company plans to roll out more than 10 EV models, across multiple segments – from compact EVs to electrified SUVs. In the coming years, Mercedes-Benz will slowly increase its EV portfolio.

By 2025, it intends to convert 25 percent of annual vehicle sales to EVs. In order to meet this goal, the establishment's Smart brand will phase out all fuel-powered models in favor of electrified units by 2020. Should the company complete the transition in a timely manner, it will be the first business to fully transition from traditional fuel-powered vehicles to electric-powered cars.

"With the production of a compact electric car in Hambach, we are adding further capacities for our electric initiative at six locations on three continents," explained Markus Schäfer, Member of the Divisional Board of Management of Mercedes-Benz Cars, Production and Supply Chain.

"The smart plant in Hambach will become a part of our global compact car production network with the lead plant Rastatt, Germany."

Lastly, to support its growing fleet of EVs, Mercedes-Benz will increase spending for the establishment of a comprehensive, global battery-production network (a total of six production sites located in three continents).

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