BBACChina – An investment running into “three-digit million” euros will enable battery production by the joint venture between Daimler and BAIC Motor, Beijing Benz Automotive (BBAC), representing the German OEM’s first battery manufacture outside its home country. The two partners plan to jointly invest five billion yuan ($758m) in the production of battery electric vehicles (BEVs) under the Mercedes-Benz brand, including battery manufacture. BEV production is scheduled to start by 2020.

“We are investing in the world’s largest market for battery electric vehicles,” said Hubertus Troska, member of the board of management, Daimler, with responsibility for Greater China. “By 2025, the Chinese market will have a substantial share in sales of Mercedes-Benz electric vehicles [EVs]. Therefore, local production will be key to the success of our EV portfolio, and crucial to flexibly serving local demand for electric vehicles.”

Xu Heyi, chairman of the BAIC Group, commented that the two companies were “laying the groundwork for our joint-venture facility, BBAC, to become a future BEV production hub in China”.

According to Daimler, the BBAC plant will combine the newest industry standards, the latest production facilities and Industry 4.0 technologies. The cells for the batteries will be sourced from China. The factory will be part of a global battery production network for Mercedes-Benz Cars which is supported by an investment of €1billion ($1.2 billion) from Daimler. So far, this includes a site at Kamenz, Germany, which opened a facility in 2010 and has another under construction at a cost of €500m.

More than ten electric Mercedes-Benz vehicles are set to be launched by 2022, with €10 billion invested in the OEM’s electric expansion over the coming years. Daimler estimates that EVs will account for 15-25% of total sales for Mercedes-Benz by 2025.