Here's a textbook case of taking two steps forward, and one step back.

The former Smart factory in Hambach, France, became all-electric when the brand dropped its gasoline models, and was initially planned to continue making electric cars for fellow Daimler division Mercedes-Benz. Instead, the factory may build gasoline and diesel SUVs.

That's because Mercedes is in discussions to sell the factory to Ineos Automotive, which plans to build its Grenadier SUV there. Ineos originally planned to build its own factory in Wales, but that work has been suspended, the company said in a press release Monday.

The coronavirus pandemic "has led to significant overcapacity in the European auto industry," and Ineos wants to take advantage of that, the press release said. A factory in continental Europe would also allows Ineos to avoid potential tariffs on the Grenadier's BMW-sourced engines in a post-Brexit economy.

Announced in 2017, the Ineos Grenadier is a rugged off-roader inspired by the original Land Rover Defender. It was developed with help from Austrian firm Magna-Steyr, which helped develop the Mercedes G-Class and continues to build that SUV to this day.

2021 Ineos Grenadier

2021 Ineos Grenadier

Because it is primarily focused on off-road capability rather than road manners or handling, the Grenadier utilizes body-on-frame construction and solid axles. It will be offered with gasoline and diesel inline-6 engines, with an 8-speed automatic transmission and 4-wheel drive.

If the deal goes through, the Grenadier will be a major change of pace for a factory that previously built Smart city cars, and was described by Mercedes parent Daimler as a "longstanding competence center for the production of electric vehicles."

Mercedes previously confirmed that it would build a production version of the Concept EQA compact electric car at the Hambach factory.

Smart announced the end of the road for United States sales in April 2019. It had already become an electric-only brand in the U.S. by that point and was on the way to do so for Europe.

A January 2020 deal with China's Geely (parent company of Volvo, Polestar, and Lotus) created a new company, with the Smart brand now China-based but with global aims.