Mercedes invests $1bn in Alabama battery plant in effort to overtake Tesla

Carmaker Mercedes-Benz is to spend $1bn on a 92,900 sq m battery factory next to its existing plant in Tuscaloosa, Alabama. The company plans to begin making electric SUVs there sometime in 2019.

Mercedes has already built four other battery plants around the world. This latest is being seen as a defensive move to protect its share of the luxury car market from Tesla. According to Bloomberg, the US company’s Model S saloon outsold the Mercedes S-class and BMW 7-Series in the US last year.

Markus Schaefer, Mercedes’ head of production, said the move would guarantee the future of the Tuscaloosa factory, which makes 300,000 units a year, "for the long term".

With Germany, France and the UK all planning on phasing out petrol and diesel production in the next 20 years or so all the traditional carmakers, as well as the specialist start-ups, are looking to ramp up production of pure electric models.

Mercedes is to launch its SUVs under the EQ brand – "the electric SUV of the future"; global production of these is set to start in Bremen, northern Germany, in 2019.

Daimler also said it will build a new global logistics centre and after-sales North American hub in Bibb County, Alabama.

Image: Mercedes’ EQ brand, which Tuscaloosa will make (Daimler)

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