Daimler to Buy $23 Billion in EV Battery Cells by 2030

author: FutureCar Staff    

Daimler is taking the next steps towards its commitment to electric vehicles. The luxury automaker announced this week that it will spend $23 billion buying battery cells through the year 2030, as the company develops new electric models.

In addition to buying battery cells, Daimler is investing $1 billion for the expansion of its electric lineup, while another $1 billion will be invested towards a global battery production network.

"Our electric offensive continues to gain momentum. After investing billions of euros in the development of the electric fleet and the expansion of our global battery network, we are now taking the next step: With the purchase of battery cells for more than 20 billion euros, we are systematically pushing forward with the transformation into the electric future of our company. We plan a total of 130 electrified variants at Mercedes-Benz Cars by 2022. In addition, we will have electric vans, buses and trucks." said Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG & Head of Mercedes-Benz Cars.

The suppliers are already producing battery cells in Asia and Europe and are continuing to expand in Europe and eventually the U.S. The first factory in Kamenz is already in series production and the second factory there will start series production at the beginning of 2019.

Daimler is investing more than one billion euros in a global battery production network. The company plans to purchase the cells from various global suppliers. According to Daimler, this ensures that the best possible technology and focuses on the core competence of battery assembly. The global battery production network will be spread across eight factories on three continents.

Two additional factories will be built in Stuttgart-Untertürkheim, one at the company's Sindelfingen site, and one each at the sites in Beijing, Bangkok and Tuscaloosa, Alabama,  where Mercedes Benz has an assembly plant. Daimler declined to say which suppliers would be awarded the new contracts. Currently Daimler has supply deals in place with Korea's SK Innovation, LG Chem and China's Contemporary Amperex Technology Ltd.(CATL).

Daimler said it would expand its research and development activities as battery technology evolves. These include the continuous optimization 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 that use less rare earth metals.

The Mercedes EQC EV, set for a 2019 launch, will use battery cells containing 60 percent nickel, 20 percent manganese and 20 percent cobalt, the company said. Future electric models will use batteries constructed using 80 percent nickel and only 10 percent manganese and 10 percent cobalt and Daimler is looking to reduce the use of magnesium and cobalt even further.

"Our engineers are also working on a ratio with 90 percent nickel, 5 percent manganese 5 percent cobalt in order to reduce the amount of rare earth metals even further," Daimler said, adding it was also working on solid-state batteries, which do not require any cobalt at all.

The fully-electric Mercedes Benz EQC's battery pack will have a lower amount of cobalt.

Daimler's Commitment to Sustainability in Battery Production

All of Daimler's battery suppliers are subjected to potential audits before they are awarded contracts. Approximately 700 quality engineers carry out these audits, if necessary together with human rights experts in the field.

Daimler said its next-generation batteries will cut its dependence on costly rare earth minerals including cobalt, which is mainly sourced from the war-torn Democratic Republic of Congo.

One important prerequisite for a supply contract with Mercedes-Benz Cars is consent to disclosure of the entire supply chain, including the cobalt and lithium mines that collect the raw materials for battery production.  Daimler said it will also monitor working conditions and compliance with human rights from its suppliers.

By 2022, Mercedes Benz said its entire portfolio will offer an electrified option, with various electrified alternatives available in every segment, included fully-electric SUVs. In total, there will be well over 130 variants, including models with a 48-volt electrical system, plug-in hybrids and more than ten fully-electric vehicles powered by batteries or fuel cells.

FutureCar Staff