Daimler and BAIC to jointly invest 655m euros in localisation of battery EVs in China

Daimler and BAIC have confirmed further development of their electric mobility programme in China. In the presence of German Chancellor Dr Angela Merkel and Chinese president Xi Jinping, both company partners announced today a framework agreement to further deepen cooperation at their Sino-German production joint venture Beijing Benz Automotive Co (BBAC).

The two companies pledged to jointly invest a total of five billion RMB (about 655 million euros) in the production of Battery Electric Vehicles (BEVs) under the Mercedes-Benz brand at the local production hub of BBAC in Beijing.

As part of this strategic framework agreement, Daimler and BAIC Motor are preparing to locally produce Battery Electric Vehicles by 2020 at BBAC, and to provide the necessary infrastructure for battery localisation using Chinese cells, as well as R&D capacities.

Hubertus Troska, Member of the Board of Management of Daimler AG, responsible for Greater China, and Xu Heyi, Chairman of the BAIC Group, attended the signing ceremony held in Berlin.

“Daimler is taking a strategic step forward in the field of Battery Electric Vehicles in China. Together with our local partner BAIC, we continue to invest in the world’s largest market for e-mobility,” said Hubertus Troska. “By 2025, the Chinese market will have a substantial share in global sales of Mercedes-Benz electric vehicles. Therefore, local production will be key to the success of our EV portfolio, and crucial to flexibly serving local demand for electric vehicles. With our planned localisation of BEVs and batteries with Chinese cells, we are dedicated to strengthening the region as an innovation hub for the automotive industry.”

Chairman Xu Heyi said: “By confirming our joint commitment to the development of electric drive in China, and undertaking preparations to produce BEVs at BBAC, we are giving full play to the respective strengths of both sides. Together, we are laying the groundwork for our joint venture facility BBAC to become a future BEV production hub in China.”

Earlier in June, both partners signed a framework agreement to further strengthen their strategic collaboration through investments for New Energy Vehicles (NEVs) in China. As part of the investment agreement, Daimler announced its intention to acquire a minority share in Beijing Electric Vehicle Co., Ltd. (BJEV), a subsidiary of the BAIC Group, with the purpose of strengthening strategic collaboration with BAIC in the NEV sector.

Electric offensive at Mercedes-Benz Cars
Globally, more than 10 new Mercedes-Benz electric passenger cars are scheduled to be launched by 2022. Ten billion euros will be invested in the expansion of the electric fleet over the next years, and the new electric vehicles will be produced within the global, highly flexible, and efficient Mercedes-Benz Cars production network, with plants on four continents. 

Overall, Daimler is investing around one billion euros in the global production of batteries, estimating that by 2025 electric vehicles will account for between 15 and 25 percent of the total unit sales of Mercedes-Benz.