€500 million factory will challenge Tesla's Gigafactory and produce lithium ion batteries for Mercedes-Benz's new EQ sub-brand
22 May 2017

German Chancellor Angela Merkel has broken ground on a new £431 million (€500m) factory in Germany that is planned to assemble lithium ion battery packs for Mercedes-Benz’s upcoming line-up of EQ-branded electric cars as well as its Smart Electric Drive models, new electric commercial vehicles and future hybrid models.

Mercedes-Benz unveils electric EQA hatchback concept

The new facility in Kamenz, Germany, is described as Europe’s first true electric car battery making 'gigafactory' and marks the second stage in a broader €1 billion investment made by Mercedes-Benz parent company Daimler in its Accumotive energy storage subsidiary as it prepares to enter the electric car ranks with its first unique styled EQ-badged model, previewed by the Generation EQ SUV, in 2019.

Mercedes EQ concept - first drive

Daimler hopes the establishment of the new plant will enable Mercedes-Benz to challenge electric car market leader Tesla, which is nearing completion of its battery Gigafactory in co-operation with Japanese electronics giant Panasonic in Nevada, USA, by providing the basis for a significant reduction in battery production costs together with increases in the energy density levels required to see the new generation of electric cars reach a promised range of more than 300 miles.     

“The automotive industry is facing a fundamental transformation,” said Mercedes-Benz chairman, Dieter Zetsche. “The battery factory in Kamenz is an important component in the implementation of our electric offensive. By 2022, we will have more than ten purely electric passenger cars. We also continue to drive forward the hybridisation of our fleet. Under the EQ brand, we are creating a holistic ecosystem for e-mobility.”

Accumotive produces battery modules using individual cells supplied by a number of different companies, including Samsung SDI and LG. Earlier plans by Daimler to produce its own cells were shelved when it shuttered its Litec battery development subsidiary in 2015.

The new battery facility, which is located some 37 miles north of Dresden, in Eastern Germany, is scheduled to start production in mid-2018. Covering an area of around 20 hectares, it will quadruple the production and logistics of Accumotive’s current operations.

As well as producing batteries for future Mercedes-Benz electric cars, Accumotive will also provide batteries for the company’s new 48-volt equipped models, starting with the facelifted S-Class this summer.

Global battery production capacity is set to increase almost three-fold by 2021, according to electric car industry analysts, reaching 278GWh of capacity compared to some 103GWh today.

At the ceremony marking the start of construction of new Accumotive factory, Mercedes-Benz confirmed its upcoming line-up of electric cars would be produced “within the global network of Mercedes-Benz on four continents”.

The first EQ model, the production version of the Generation EQ SUV, will roll off that line at Mercedes-Benz’s plant in Bremen, Germany, in 2019. Additionally, the German car maker also confirmed luxury class EQ models will be produced at its plant in Sindelfingen, Germany.

Mercedes-Benz expects electric cars will make up between 15% and 25% of its total sales by 2025. 

The future of the car: an Autocar guide

Our Verdict

Mercedes-Benz S-Class

The self-proclaimed 'best car in the world' gets a touch more luxury, a heap of new technology and a mild hybrid electrical system, but is it enough to hold off the latest attempts from BMW and Audi?

Join the debate


22 May 2017
They've show this concept car before and the more I see it the more I like. Mercedes look to be going for it big time now and it'll be great for Telsa to have some competition at the high end.

typos1 - Just can’t respect opinion

23 May 2017
Mercedes is really pushing some limits with their designs, I hope to own one soon :)

Add your comment

Log in or register to post comments

Find an Autocar car review

Driven this week

  • First Drive
    23 March 2018
    Fully-loaded, big-hitting diesel CLS shows the potential perils of ticking too many options boxes on your order form. A good car with a bad suspension combination.
  • BMW M5
    First Drive
    22 March 2018
    Super saloon deploys four-wheel drive to improve every facet of its driving experience. Faster and more capable than any, and more exciting than most, of its celebrated predecessors
  • Range Rover Sport SVR
    First Drive
    22 March 2018
    More power and an intoxicating soundtrack have breathed new life into our love affair with the biggest, baddest Range Rover Sport variant
  • First Drive
    21 March 2018
    The new Vantage has been developed as a Porsche 911 beater, and our first taste on UK roads suggests it can live up to that bold claim
  • Nissan Leaf Tekna
    The is the new Nissan Leaf
    First Drive
    21 March 2018
    The new version of the world's best-selling electric car gains a bigger battery and more power. How does it compare to rivals such as the Volkswagen e-Golf?