Mercedes Plots Tesla Attack With $1 Billion U.S. Electric Push
Mercedes Plots Tesla Attack With $1 Billion U.S. Electric
Push
Company to make plug-in vehicles, batteries at U.S.
factory
Investment in electric SUVs to create 600 jobs in Alabama
By Christoph Rauwald and Elisabeth Behrmann September 21,
2017, 9:00 AM PDT
Daimler AG plans to spend $1 billion to start production
of Mercedes-Benz electric vehicles at its Alabama factory, setting the world’s
largest luxury-car maker up to battle with battery-car specialist Tesla Inc. on
its home turf.
The German automaker will build its fifth battery plant
globally and create more than 600 jobs in the region, the company said Thursday
in a statement. The Alabama factory will assemble electric sport utility
vehicles, taking on Tesla’s Model X and making Stuttgart-based Daimler the
first European company to assemble plug-in autos in the U.S.
“We’re celebrating our 20th anniversary at our production
facility in Tuscaloosa, Alabama, and we’re taking this as an opportunity to
expand the operation and further fuel growth,” production chief Markus Schaefer
said in a Bloomberg TV interview. “We’re very confident for future growth in
the U.S. in the long-term. ”
While the investment could ease tensions over President
Donald Trump’s claims that too many German cars were being sold to Americans,
the real target is certainly the intensifying rivalry with Tesla. The Palo
Alto, California-based carmaker’s flagship Model S sedan outsold the Mercedes
S-Class and BMW 7-Series last year in the U.S., putting pressure on the brands
to defend their image as automotive innovators.
Electric Surge
Daimler’s investment shows the carmaker’s shift to
electric vehicles is taking shape. The German manufacturer is also in talks to
expand its Denza joint venture with BYD Co. in China with additional models,
Chairman Wang Chuanfu told a group of reporters in the southern Chinese city on
Thursday.
Like other automakers, Daimler is preparing for a time
when sales of battery-powered vehicles finally take off. U.S. sales are
projected to grow fourfold from last year to 643,000 in 2021, about 4 percent
of the U.S. auto market, according to estimates by Bloomberg New Energy
Finance. The segment is expected to account more than one-third of sales in
2030.
The shift is proving costly. Daimler laid out a plan last
week to slash 4 billion euros ($4.8 billion) from spending by 2025 to
compensate for weaker margins from electric cars as global automakers
accelerate efforts to roll out cleaner vehicles amid tightening emissions rules
across the globe.
As part of a 10 billion-euro green-car rollout, Mercedes
unveiled an electric hatchback this month at the Frankfurt auto show. In
addition to the new EQ line of battery-powered cars, the manufacturer will add
electrified versions across its model range. Daimler’s Smart city-car brand
will gradually stop offering models with combustion engines as of 2020.
Mercedes, which topped BMW as the top luxury auto brand
in the U.S. last year, started assembling vehicles in Alabama 20 years ago. The
factory has since emerged as one of the brand’s main manufacturing hubs
worldwide, with some 70 percent of assembled vehicles slated for export to
global markets. About 3,700 employees produce the GLE, GLE Coupe and GLS SUVs
at the site, which added the the C-Class sedan for the North American market in
2014.
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