Daimler announced today an important €500 million ($543.5 million) investment in a new battery factory in Kamenz, Germany, through its ACCUmotive subsidiary. The company already has a relatively small battery plant at the location, but it purchased 20 hectares of land adjacent to the existing plant and plans to build a new factory to produce li-ion batteries for the electric vehicles of its Mercedes and Smart brands.

To be clear, two years ago, ACCUmotive invested about €100 million to expand the current plant, which now has 20,000 square meters (~215,000 sq-ft) of production aera, but this new investment is for an entirely new factory of 40,000 square meters (~430,500 sq-ft) of production space.

Daimler Chairman Dr. Dieter Zetsche on the announcement:

“To get closer to fully electric driving, we keep investing big in the key component of emission-free vehicles: powerful batteries.  We are now devoting another 500 million Euros to build a second battery factory in Germany. This underlines our commitment to the consistent expansion of electromobility.”

The company didn’t confirm the capacity of the new factory in term of energy capacity, but based on the size of the investment and size of the production space, it should at least a few GWh.

The battery pack of Mercedes’ only all-electric vehicle, the B-Class, is manufactured by Tesla Motors with battery cells from Panasonic, but the automaker already confirmed it wouldn’t renew Tesla’s supply contract.

Along with the new plant, it has been recently revealed that SK Innovation, a battery cell maker part of the South Korea-based chemical and energy conglomerate SK, has been selected as the supplier of battery cells for Mercedes’ upcoming line of electric vehicles. Last month, Daimler green-lighted 4 new long-range electric vehicles, which will reportedly be two sedans and two crossover SUVs.

Construction at the new factory should start later this year, according to Daimler, and production should start in summer 2017.

Featured Image: ACCUMOTIVE’s current battery plant in Kamenz, Germany.

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