Mercedes-Benz Generation EQ concept, 2016 Paris auto showEnlarge Photo
Daimler, the parent company of Mercedes-Benz, announced that it will invest up to $1 billion to build electric SUVs and batteries in and around its assembly plant in Tuscaloosa, Alabama.
The plans, first reported reported Thursday in The Wall Street Journal (paywalled), represent a major expansion of electric-car manufacturing in the U.S.
So far, Ford, General Motors, and Nissan produce either battery-electric or plug-in hybrid vehicles at U.S. plants. (The plug-in Chrysler Pacifica Hybrid minivan is built in Canada.)
A summary of the report by the Reuters news service notes the Daimler announcement followed one by BMW in June that added capacity and 1,000 jobs to that company's factory in South Carolina, although BMW said nothing about electric cars.
All automakers have been under political pressure to import fewer cars into the U.S. and build more within the country.
Mercedes-Benz opened its Alabama plant 20 years ago, and it now produces the bulk of its global production of crossover SUVs, many of them exported around the world.
Mercedes-Benz C-Class production in Tuscaloosa, AlabamaEnlarge Photo
Initially slow on the uptake in electric cars, following two decades of research into hydrogen fuel-cell vehicles, Daimler has racheted up the pace and scope of its EV plans over the last two years.
The company now plans to launch four different vehicles in its EQ series of dedicated battery-electric vehicles by 2022.
And it has accelerated plans to offer even more by 2025 as a number of factors have combined to make electric vehicles increasingly urgent for the initially reluctant German industry.
That country's luxury makers have seen continued erosion in their medium and large sedan market as the Tesla Model S has captured more than 100,000 of their customers globally.
Diesel engines, once seen as the way for the industry to reduce carbon emissions, are under attack on numerous fronts, from the continuing Volkswagen diesel emission scandal through bans in numerous cities to tougher real-world emission testing where they come off badly.
In addition, battery prices have fallen faster than predicted and the immense challenge of bringing not only hydrogen vehicles but an entirely new fueling system to market are becoming apparent.
Mercedes-Benz EQA concept, 2017 Frankfurt auto showEnlarge Photo
The first of Daimler's long-range electric vehicles, the Mercedes-Benz EQC crossover utility, won't go on sale until 2019.
The company had previously committed to build that vehicle and its battery pack in Germany, but will offer other SUV variants on its electric-car architecture later on.
In its statement, the company said production of a Mercedes-Benz EQ "electric SUV' will begin "early next decade," but construction of an adjacent battery plant would start next year.
That battery assembly facility will produce packs not only for the electric SUV to be built in Alabama but also for other vehicles.
The announcement by Mercedes-Benz underscores the political tides of the time, the relatively attractiveness of Southern non-union states as cost-effective locations to build and export cars, and the seemingly bright prospects for growth in electric-car sales.
[EDITOR'S NOTE: This story was published based on reporting by The Wall Street Journal which said Mercedes-Benz was expected to make the announcement described. The company did so later in the day, and we have updated the article accordingly.]