Mercedes-Benz auf der Silvretta E-Auto Rallye 2015

You simply can’t manufacture electric vehicles in volume if you can’t secure a steady supply of battery cells. Some automakers are doing it by partnering with battery makers, like GM with LG, and others are directly investing in battery manufacturing capacity, like Tesla with the Gigafactory – though still in partnership with a battery maker, Panasonic.

Now Daimler plans to further its own investment in battery production by 1 billion euros ($1.1 billion USD) in order to support its electric vehicle ambitions with Mercedes’ new ‘EQ’ brand and the new Smart electric car lineup.

The German automaker produces its own battery packs through its ACCUmotive subsidiary. Earlier this year, Daimler announced an important €500 million ($543.5 million) investment in a new battery factory in Kamenz, Germany, for its subsidiary.

The company also selected SK Innovation, a battery cell maker part of the South Korea-based chemical and energy conglomerate SK, as the supplier of battery cells for Mercedes’ upcoming line of electric vehicles.

At a press meeting in Hamburg yesterday, CEO Dieter Zetsche told journalists that the company is restructuring its spending to align with the electric vehicle plans and that it would include a 1 billion euros investment in battery technology. Automotive News reported:

“The Mercedes luxury brand and Daimler’s Smart city-car unit are introducing at least 10 battery-powered cars in coming years, and the development budget includes 1 billion euros in battery technology.”

Daimler projects for 25% of its deliveries to be electric vehicles, though that includes plug-in hybrids, within the next decades. Last year, Daimler produced about 3 million vehicles. 25-percent of its capacity with let’s say an average of 30 kWh battery pack capacity by accounting for plug-in hybrids, Daimler would need over 22 GWh of battery capacity within the next 10 years.

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